Making Tax Digital for Income Tax is now mandatory for those above the income threshold, and one of the first questions sole traders and landlords ask is: how much is this going to cost me?
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
Why Price Matters for Sole Traders
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
What You Need at Minimum
Before comparing options, let's establish the baseline. Any MTD software must:
- Be HMRC-recognised — listed on HMRC's official compatible software page
- Support digital record keeping — allow you to record income and expenses
- Submit quarterly updates — send data to HMRC via the MTD API
- Submit the Final Declaration — finalise your annual business figures and confirm your overall tax position
If the software does all five, it meets the legal requirement. Everything else is a bonus.
Affordable MTD Software Options
ClearMTD availability
ClearMTD is in development and has not received HMRC production approval. Public registration and live submissions are unavailable. Its current scope is owner-operated digital records and in-year quarterly updates for self-employment, UK property and foreign property. Final Declaration and agent filing are not supported.
Free commercial software
HMRC does not provide its own MTD for Income Tax software. Free products are available from commercial providers; check their eligibility, limits and supported income sources in the official software finder.
Bridging Software
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
Strengths: - Very cheap - Keep using your existing spreadsheet
Weaknesses: - You maintain the spreadsheet yourself — errors are your responsibility - Two tools instead of one (spreadsheet + bridging software) - Limited support for troubleshooting - Formatting must match what the bridging tool expects
Best for: People who are very comfortable with spreadsheets and want to maintain full control.
Budget Tiers From Larger Providers
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
Strengths: - From established companies with track records - May include basic invoicing - Regular updates and support
Weaknesses: - Starter tiers may have limitations (e.g. transaction limits, fewer reports) - Upselling to higher tiers is common - The software is still designed for a broader audience, even at the lowest price
Best for: People who want a recognisable brand name and may grow into additional features.
What to Watch Out For
Hidden Costs
Some providers advertise a low monthly price but charge extra for: - HMRC submissions (per submission or annual fee on top) - Bank feeds or integrations - Support beyond basic documentation - Additional users or accountant access
Always check the total annual cost including any per-submission or add-on charges.
Trial Periods That Convert
Free trials are common and useful — but check what happens when the trial ends. Some providers automatically convert to a paid plan and charge your card. Others restrict your access until you choose a plan. Know the terms before you sign up.
Feature Limitations on Cheap Plans
Budget tiers from larger providers sometimes impose limits — a maximum number of transactions per month, no bank feeds, limited reporting. For MTD compliance, you need unlimited transactions (or at least enough to cover your business volume) and the ability to submit all four quarterly updates plus the annual declarations.
Lack of MTD for Income Tax Specifically
Some software supports MTD for VAT but not yet MTD for Income Tax. These are different HMRC programmes with different APIs. Ensure the software explicitly supports MTD for Income Tax Self Assessment, not just MTD for VAT.
Price Comparison Summary
ClearMTD is not yet available for live filing. Check currently recognised products in the official HMRC software finder.
The Value Equation
The cheapest option is not always the best value. Consider:
- Time cost — if cheap software takes an hour per quarter to wrestle with, and better software takes ten minutes, your time has value too
- Error risk — basic tools with minimal guidance increase the risk of mistakes that could trigger HMRC penalties
- Support — when something goes wrong at 9pm on submission deadline day, is there anyone to help?
- Reliability — can you trust that the software will submit correctly every quarter?
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
Our Recommendation
ClearMTD is awaiting HMRC production approval and is not available for live filing. Its current scope excludes Final Declaration and agent filing.
Join the free ClearMTD waitlist for launch updates. No launch date is confirmed.
HMRC does not provide its own MTD for Income Tax software. Check free commercial products, eligibility and limits in the official HMRC software finder.
For a broader look at budget MTD options, see our guide to the cheapest MTD software UK. And for help deciding whether you need MTD software at all, see our article on do I need MTD software.
Frequently Asked Questions
Is the cheapest MTD software safe to use?
As long as the software is HMRC-recognised and listed on their compatible software page, it is safe for submissions. However, cheaper tools may offer less support and fewer features for record keeping. Always verify HMRC recognition before committing.
Can I switch to cheaper software if I started with an expensive one?
Yes. You can switch MTD software at any time. Your submission history is held by HMRC, not by the software. Ensure your current quarter's transactions are entered in the new tool before you submit.
Are there any completely free MTD options besides HMRC's tool?
Some providers offer free plans with limitations (e.g. a limited number of transactions or submissions). Check the terms carefully — truly free, fully functional MTD software from commercial providers is rare.
Does cheaper software submit to HMRC the same way as expensive software?
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
Should I choose software based on price alone?
Price is important but should not be the only factor. Consider ease of use, reliability, support quality, and whether the software meets your specific needs (e.g. property income support for landlords). The best value is software that is affordable and saves you time.
