⚡ MTD mandatory from 6 April — are you ready?
Regulas

Best HMRC MTD software for sole traders & landlords (2026)

ComparisonBy Daniel Hart·9 March 2026·10 min read

With Making Tax Digital for Income Tax going live on 6 April 2026, choosing the right HMRC MTD software is one of the most important decisions you'll make this year. The wrong choice means overpaying for features you don't need — or worse, realising your software doesn't properly support MTD for Income Tax when your first quarterly update is due.

We've compared the four leading options for UK sole traders and landlords: Regulas, Xero, QuickBooks, and FreeAgent.

What to look for in MTD software

At a minimum, your MTD software needs to:

  • Connect to HMRC via their official MTD APIs for Income Tax
  • Keep digital records of income and expenses
  • Submit quarterly updates (4 times per year) and a final declaration
  • Support your income types — self-employment, UK property, or both

Beyond the basics, look for: live tax estimates, deadline reminders, AI categorisation, and landlord-specific features if you have rental income.

The 4 best MTD software options compared

Regulas

Free / £5.99 – £29.99/mo

Strengths

  • ✓Purpose-built for MTD for Income Tax
  • ✓Free tier with digital record-keeping
  • ✓AI-powered transaction categorisation
  • ✓Landlord-specific features (Section 24, portfolio view)
  • ✓One-click HMRC submissions
  • ✓Agent multi-client support on Enterprise tier

Weaknesses

  • ✕New to market (launching April 2026)
  • ✕No invoicing or payroll (MTD-focused only)

Best for: Sole traders and landlords who want MTD-first software without paying for features they won't use

Join waitlist →

Xero

£15 – £47/mo

Strengths

  • ✓Established brand with large accountant network
  • ✓Full accounting suite (invoicing, bank feeds, payroll)
  • ✓MTD for VAT already supported

Weaknesses

  • ✕MTD for Income Tax support is an add-on, not core
  • ✕Higher price — cheapest plan is £15/mo
  • ✕Complex interface for non-accountants
  • ✕Designed for businesses, not sole traders or landlords

Best for: Businesses that already use Xero for accounting and want to add MTD compliance

Compare Xero vs Regulas →

QuickBooks

£12 – £32/mo

Strengths

  • ✓Strong mobile app
  • ✓Good bank feed integrations
  • ✓MTD for VAT supported

Weaknesses

  • ✕MTD for Income Tax readiness uncertain
  • ✕Tax calculations geared toward US market
  • ✕Feature-heavy for simple MTD needs
  • ✕No free tier

Best for: Self-employed people who want accounting + MTD in one more fully-featured platform

Compare QuickBooks vs Regulas →

FreeAgent

£14.50 – £29.50/mo

Strengths

  • ✓NatWest/RBS customers get it free
  • ✓Self Assessment filing built in
  • ✓Clean, user-friendly interface

Weaknesses

  • ✕MTD for Income Tax readiness is limited
  • ✕Landlord features are basic
  • ✕No AI categorisation
  • ✕No free tier for non-NatWest customers

Best for: Freelancers and NatWest customers who need a simple all-in-one

Compare FreeAgent vs Regulas →

Our verdict

If you're a sole trader or landlord who needs straightforward Making Tax Digital for Income Tax compliance without paying for a full accounting suite, Regulas is the most focused and affordable option. It's built specifically for MTD — not retrofitted from an existing accounting product.

If you already use Xero or QuickBooks for your business accounting and they offer confirmed MTD for Income Tax support, it may make sense to stay within your existing stack. But check carefully — not all plans include MTD for Income Tax out of the box.

Frequently asked questions about MTD software

What is the best free MTD software?▾
Regulas offers a free tier for digital record-keeping under Making Tax Digital. HMRC also provides basic free tools, but they lack features like AI categorisation, live tax estimates, and one-click submissions.
Is Xero compatible with MTD for Income Tax?▾
Xero supports MTD for VAT and has announced plans for MTD for Income Tax. However, it's primarily a full accounting suite — if you only need MTD compliance, you may be paying for features you don't use.
What software does HMRC recommend for MTD?▾
HMRC doesn't endorse specific software, but they maintain an official list of compatible software on GOV.UK. Any software on that list meets the technical requirements for quarterly submissions and final declarations.
Do I need different software for MTD for VAT and MTD for Income Tax?▾
Not necessarily, but the registrations are separate. Some software (like Xero) supports both. Others, like Regulas, specialise in MTD for Income Tax. Check your provider's coverage before assuming one tool covers both.
Can I switch MTD software mid-year?▾
Yes, you can switch at any time. HMRC doesn't lock you into a single provider. However, you'll need to migrate your records to the new software and re-authorise the HMRC connection.

Try Regulas — built for MTD

Join the waitlist for early access. Free tier available, founding-member pricing locked in at signup.

Disclaimer: Pricing and features based on publicly available information as of March 2026. Regulas is developed by Smart Path IT Limited. We aim for accuracy but recommend checking each provider's website for the latest details. This is not financial or tax advice.