Best Accounting Software for UK Sole Traders (2026)
Making Tax Digital for Income Tax changes everything from April 2026. Here is what UK sole traders actually need to do — and which software is on the HMRC-approved list.
The FreeAgent + Mettle option (best for most)
FreeAgent is free with a NatWest, RBS, or Mettle business current account. It is on the HMRC MTD for Income Tax compatibility list. For a UK sole trader under £80K turnover with basic needs, this is the zero-cost MTD-compliant starting point.
MTD for Income Tax — the mandatory dates
- April 2026: Mandatory for sole traders and landlords with qualifying income above £50,000
- April 2027: Mandatory above £30,000
- April 2028: Mandatory above £20,000 (subject to confirmation)
Source: gov.uk/guidance/check-if-youll-need-to-sign-up-for-making-tax-digital-for-income-tax
HMRC-compatible software (verified 2026-05-19)
The official HMRC list is at gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax. Verified compatible as of 2026-05-19:
- FreeAgent — Free with Mettle/NatWest; £19/mo retail. Best for sole traders with basic needs.
- Xero Standard — From £33/mo. Better for more complex needs or e-commerce.
- QuickBooks Online — From £35/mo (Simple Start). Note: QuickBooks Self-Employed is NOT the same product and is NOT MTD-compatible.
- Sage Business Cloud — From £14/mo.
Not MTD-compatible as of 2026-05-19: FreshBooks, Wave, Bonsai, HoneyBook, QuickBooks Self-Employed. Always verify on gov.uk before purchasing.
Don't use this for: UK sole traders using US-only software like QuickBooks Self-Employed or Wave for MTD compliance
QuickBooks Self-Employed is a US-only product and does not support UK Making Tax Digital. Wave has no UK MTD compatibility. FreshBooks is not on the HMRC MTD list. Using these tools will not satisfy your MTD obligations from April 2026. Always verify on the official HMRC compatibility list.MTD Explained — Full Guide
What quarterly submissions involve, who is affected
What is MTD? (glossary)
Plain-English definition with HMRC source links