MTD Software Under £10/Month: Your Options
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?
The good news is that MTD compliance does not require expensive software. While the big-name platforms charge £15-45+ per month, several options exist at £10 per month or less. This article compares the affordable end of the market so you can make an informed choice without overspending.
Why Price Matters for Sole Traders
For a sole trader earning £50,000-£60,000, every business expense counts. MTD software is a mandatory overhead — you cannot opt out if your income exceeds the threshold. Over a year, the difference between a £8/month tool and a £30/month tool is £264. Over five years, that is over £1,300.
The question is whether more expensive software gives you £264 per year of additional value. For some businesses, the answer is yes — they need invoicing, payroll, and integrations. For a sole trader or landlord who needs MTD compliance and nothing else, the answer is often no.
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
- Handle the End of Period Statement — finalise your annual business figures
- Submit the Final Declaration — 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
ClearMTD is built specifically for MTD for Income Tax compliance. It focuses entirely on what HMRC requires — digital records, quarterly submissions, and annual declarations — without the extras that drive up costs at other providers.
Strengths: - Designed for MTD compliance, nothing more - Extremely simple to use — no accounting knowledge required - Quick setup (under 10 minutes) - Supports both sole traders and landlords - HMRC-recognised
Best for: Sole traders and landlords who want the simplest, most affordable path to compliance.
HMRC's Free Tool
HMRC offers its own basic MTD software at no cost. It handles the submission side, but has limitations. We cover this in detail in our article on free MTD software from HMRC.
Strengths: - Completely free - Direct from HMRC
Weaknesses: - Very basic functionality - Limited record-keeping features - No support beyond HMRC's general helpline - Not suitable for landlords with multiple properties or complex situations
Best for: People who want to spend absolutely nothing and have very simple affairs.
Bridging Software
Some providers offer cheap bridging software that connects a spreadsheet to HMRC's MTD API. Prices can be under £5/month or even one-off payments.
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
Some established providers offer starter tiers at or near the £10/month mark. These often include basic accounting features alongside MTD submissions.
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
| Software | Approximate Monthly Cost | MTD ITSA Support | Invoicing | Complexity |
|---|---|---|---|---|
| ClearMTD | Under £10 | Yes | No | Very low |
| HMRC Free Tool | Free | Yes (basic) | No | Low |
| Bridging software | £2-5 (varies) | Yes (submission only) | No | Medium |
| Budget tiers (various) | £8-15 | Varies | Sometimes | Medium |
| Full platforms (Xero, Sage, etc.) | £15-45+ | Yes | Yes | High |
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?
The sweet spot for most sole traders is affordable software that is reliable, simple, and purpose-built for MTD. You do not need to spend £30+ per month, but the very cheapest options sometimes create more problems than they solve.
Our Recommendation
For sole traders and landlords who want affordable, hassle-free MTD compliance, ClearMTD offers the best balance of price, simplicity, and reliability. It does exactly what you need — digital records, quarterly submissions, and annual declarations — without charging for features you will never use.
If your affairs are extremely simple and you are comfortable with HMRC's basic tool, the free option is worth trying first. But if you want something that makes the process easy rather than just possible, a dedicated tool under £10/month is a sensible investment in your compliance and peace of mind.
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?
Yes. All HMRC-recognised software uses the same MTD API. The data submitted to HMRC is identical regardless of whether your software costs £5 or £45 per month. The differences are in the user experience, record-keeping features, and support.
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.