Best Software for Sole Traders

Why Sole Traders Need MTD-Compatible Software

From April 2026, most UK sole traders with income over £50,000 will need to comply with Making Tax Digital for Income Tax Self-Assessment (MTD ITSA). If your income exceeds £30,000, you’ll be brought into MTD from April 2027.

To stay compliant, you'll need to:

• Keep digital records of income and expenses

• Submit quarterly updates to HMRC

• File a final declaration annually

• Use HMRC-recognised software to do it all

Whether you're a tradesperson, freelancer, consultant, or side hustler — the right MTD software can simplify compliance, improve financial organisation, and help you avoid HMRC penalties.

Top 5 MTD Software Options for Sole Traders

Here’s our list of the best MTD software for sole traders, based on features, pricing, ease of use, and compatibility with HMRC’s MTD ITSA requirements.

1. FreeAgent – Best All-Rounder for Sole Traders

Overview: FreeAgent is designed specifically for UK sole traders and small businesses. It’s a popular choice because it’s easy to use and offers full MTD ITSA functionality — and it’s completely free if you bank with Mettle, NatWest, or RBS.

Key Features:

• MTD for Income Tax and VAT compatible

• Invoicing, expenses, time tracking

• Bank feeds & mileage tracking

• Accountant collaboration

• Mobile app available ✅

Price: Free with eligible business bank accounts; otherwise from £14.50/month

2. QuickBooks Online – Best for Simplicity & Support

Overview: QuickBooks is globally trusted accounting software. Its simple interface and built-in MTD tools make it ideal for sole traders new to digital bookkeeping.

Key Features:

• Full MTD ITSA support

• Automatic expense categorisation

• Invoice and payment tracking

• Excellent customer support

• Mobile app available ✅

Price: From £12/month (frequent promotions available)

3. Untied – Best Budget-Friendly App

Overview:Untied is built for individuals who want to manage tax from their smartphone. It offers a free plan and is designed for self-employed sole traders who don’t need complex features.

Key Features:

• MTD for Income Tax compliant

• Prepare and submit directly to HMRC

• Connect to bank accounts

• Simple interface for non-accountants

• Mobile app only ✅

Price: Free plan available; Pro from £9.99/month

4. Xero – Best for Growing Sole Traders & Side Businesses

Overview: Xero is a robust cloud accounting platform great for sole traders planning to grow or who want to work closely with their accountant.

Key Features:

• MTD ITSA and VAT ready

• Expense management & cash flow tools

• App marketplace for customisation

• Great accountant integration

• Mobile app available ✅

Price: From £15/month

5. Sage Accounting – Best for Traditional Sole Traders

Overview:Sage is one of the most recognised accounting software providers in the UK. Sage Accounting is now fully cloud-based and supports MTD ITSA.

Key Features:

• MTD-ready

• Basic to advanced bookkeeping tools

• Invoice creation, bank feeds, cash flow

• Partnered with accountants across the UK

• Mobile app available ✅

Price: From £14/month

Quick Comparison Table

Software	MTD ITSA Ready	Mobile App	Free Plan	Ideal For
FreeAgent	✅	✅	✅*	Freelancers & bank customers
QuickBooks	✅	✅	❌	Beginners & service providers
Untied	✅	✅	✅	Budget-conscious & mobile users
Xero	✅	✅	❌	Growing or side businesses
Sage	✅	✅	❌	Traditional sole traders

*FreeAgent is free when you bank with Mettle, NatWest, or RBS.

How to Choose the Right Software

Ask yourself:

• Do you need to track both business and property income?

• Will your accountant be involved?

• Do you prefer mobile or desktop access?

• Are you looking for a free or low-cost plan?

• Do you want automation features like bank feeds?

If you’re just getting started, a simple free app like Untied or a Mettle + FreeAgent combo can be ideal. For more advanced needs, QuickBooks, Xero, or Sage offer powerful tools with accountant support.

Final Thoughts

Choosing the best MTD software as a sole trader is essential for staying compliant and stress-free when Making Tax Digital becomes mandatory.

The good news? There’s never been a better time to switch — with many software tools offering free trials, bank-linked discounts, and easy setup.