MTD for Income Tax software: what it really costs over two years (UK)
Answer (among the 13 products we evaluated)
- Among the 13 MTD for Income Tax products we evaluated on 10 October 2026, for a sole trader who isn't VAT-registered and has no bank deal, the lowest-cost paid plan with confirmed year-end filing costs £156.24 over the first two years including VAT: Xero Simple or Sage Sole Trader, £55.44 in year one with the 90% six-month intro offer, then £100.80 a year.
- With both trade and rental income, FreeAgent needs two accounts and costs £522 over the first two years including VAT, about 3.3 times the lowest-cost paid option with confirmed year-end filing among the products we evaluated (£156.24).
Rules (HMRC)
- Who must start, and when: Qualifying income over £50,000 in 2024-25: from 6 April 2026. Over £30,000 in 2025-26: from 6 April 2027. Over £20,000 in 2026-27: from 6 April 2028. Source
- What counts as qualifying income: Gross self-employment turnover plus gross property income (your share of joint property), before expenses. Wages, dividends, pensions and partnership shares don't count. Source
- Quarterly updates: Due 7 August, 7 November, 7 February and 7 May. No penalty points for late updates in 2026-27; from 2027-28, 4 points means a £200 penalty. Source
- Exemptions: Extra time or cost on its own isn't a reason for an exemption. Source
- HMRC's software guidance: HMRC points to third-party software, some of it free with usage limits. Source
Prices and conditions of the products we checked (2026-10-10)
| Product | Price | Conditions | Source |
|---|---|---|---|
| Xero Simple | £7/month + VAT; 90% off for 6 months (Xero may withdraw the offer) | Not for VAT-registered businesses. 10 invoices a month. Xero says one subscription can hold several income streams. | www.xero.com |
| QuickBooks Sole Trader Plus | £10/month + VAT; 90% off for 6 months (offer shown as ending 1 November 2026) | Not for VAT-registered businesses. Aimed at sole traders and single-property landlords. | quickbooks.intuit.com |
| FreeAgent | Sole trader £190/year, landlord £100/year (+ VAT); 50% off the first year | Trade and rental income need two separate accounts. Free with a NatWest, RBS, Ulster or active Mettle business account (one account per bank account). | www.freeagent.com |
| Sage Sole Trader Free | £0 | Not for VAT-registered businesses. One income source (trade or UK property), 25 auto-categorised transactions, 5 invoices a month. | www.sage.com |
| Sage Sole Trader | £7/month + VAT; 90% off for 6 months | Not for VAT-registered businesses. | www.sage.com |
| Coconut MTD filing | £129.99/year including the year-end return | VAT basis not stated; confirm the price in the app. | getcoconut.com |
| Hammock (landlords) | £76.80/year + VAT for 1–3 properties (annual); £15/month for 4–10 | Landlords only. | usehammock.com |
| Monzo Business | Free with the free business account | Cash basis only. | monzo.com |
| Starling | Free with a sole trader account | Year-end return 'coming soon': can't yet file the final declaration. | www.starlingbank.com |
| Pandle | Free (MTD IT submissions included); Pro £5/month + VAT | Doesn't say whether the final declaration is included. | pandle.com |
| Affordable MTD (bridging) | Free for 2026-27, then £19.99/year | For spreadsheet users. No foreign property yet. | affordablemtd.com |
| VitalTax (bridging) | £30/year per person + VAT | Doesn't say whether the year-end declaration is included. | vitaltax.co.uk |
| Coconut Bridging | £49.99/year + £49.99 for the year-end | For spreadsheet users. | getcoconut.com |
Two-year cost by situation
Decision rule (applied to the products we checked): choose a plan with confirmed year-end filing, then the lowest two-year total that fits your income sources and volume.
Sole trader, not VAT-registered, no bank deal, no spreadsheet
| Option | Year 1 | Year 2 | Two-year total | Year-end filing | Conditions |
|---|---|---|---|---|---|
| Sage Sole Trader Free | £0.00 | £0.00 | £0.00 | confirmed | Limits: one income source, 25 auto-categorised transactions, 5 invoices/mo. |
| Xero Simple | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months can be withdrawn. 10 invoices/mo. |
| Sage Sole Trader | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months. |
| QuickBooks Sole Trader Plus | £79.20 | £144.00 | £223.20 | confirmed | |
| Coconut MTD filing | £129.99 | £129.99 | £259.98 | confirmed | Includes year-end. Confirm the price in the app. |
| FreeAgent | £114.00 | £228.00 | £342.00 | confirmed | Annual billing, 50% off the first year. |
| Pandle Free | £0.00 | £0.00 | £0.00 | not stated | MTD IT submissions included. Doesn't say whether the final declaration is included. Bank feeds need Pro (£5/mo + VAT). |
Sole trader, VAT-registered, no bank deal
| Option | Year 1 | Year 2 | Two-year total | Year-end filing | Conditions |
|---|---|---|---|---|---|
| Coconut MTD filing | £129.99 | £129.99 | £259.98 | confirmed | Includes year-end. Confirm the price in the app. |
| FreeAgent | £95.00 | £190.00 | £285.00 | confirmed | Annual billing, 50% off the first year. |
| Pandle Free | £0.00 | £0.00 | £0.00 | not stated | MTD IT submissions included. Doesn't say whether the final declaration is included. Bank feeds need Pro (£5/mo + VAT). |
Landlord with 2 properties only, not VAT-registered
| Option | Year 1 | Year 2 | Two-year total | Year-end filing | Conditions |
|---|---|---|---|---|---|
| Sage Sole Trader Free | £0.00 | £0.00 | £0.00 | confirmed | Limits: one income source, 25 auto-categorised transactions, 5 invoices/mo. |
| Xero Simple | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months can be withdrawn. 10 invoices/mo. |
| Sage Sole Trader | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months. |
| FreeAgent | £60.00 | £120.00 | £180.00 | confirmed | Annual billing, 50% off the first year. |
| Hammock Basic | £92.16 | £92.16 | £184.32 | confirmed | 1–3 properties, annual billing. |
| Coconut MTD filing | £129.99 | £129.99 | £259.98 | confirmed | Includes year-end. Confirm the price in the app. |
| Pandle Free | £0.00 | £0.00 | £0.00 | not stated | MTD IT submissions included. Doesn't say whether the final declaration is included. Bank feeds need Pro (£5/mo + VAT). |
Sole trader and landlord, not VAT-registered
| Option | Year 1 | Year 2 | Two-year total | Year-end filing | Conditions |
|---|---|---|---|---|---|
| Xero Simple | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months can be withdrawn. 10 invoices/mo. Xero says one subscription can hold several income streams. |
| Sage Sole Trader | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months. The free plan covers only one income source, so trade + rental needs a paid plan. |
| Coconut MTD filing | £129.99 | £129.99 | £259.98 | confirmed | Includes year-end. Confirm the price in the app. |
| FreeAgent | £174.00 | £348.00 | £522.00 | confirmed | Needs two separate accounts (sole trader + landlord). |
| Pandle Free | £0.00 | £0.00 | £0.00 | not stated | MTD IT submissions included. Doesn't say whether the final declaration is included. Bank feeds need Pro (£5/mo + VAT). |
Sole trader with a NatWest/RBS/Ulster business account
| Option | Year 1 | Year 2 | Two-year total | Year-end filing | Conditions |
|---|---|---|---|---|---|
| FreeAgent (free with your bank) | £0.00 | £0.00 | £0.00 | confirmed | Free while you keep the account (Mettle: at least one transaction a month). |
| Sage Sole Trader Free | £0.00 | £0.00 | £0.00 | confirmed | Limits: one income source, 25 auto-categorised transactions, 5 invoices/mo. |
| Xero Simple | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months can be withdrawn. 10 invoices/mo. |
| Sage Sole Trader | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months. |
| QuickBooks Sole Trader Plus | £79.20 | £144.00 | £223.20 | confirmed | |
| Coconut MTD filing | £129.99 | £129.99 | £259.98 | confirmed | Includes year-end. Confirm the price in the app. |
| Pandle Free | £0.00 | £0.00 | £0.00 | not stated | MTD IT submissions included. Doesn't say whether the final declaration is included. Bank feeds need Pro (£5/mo + VAT). |
Sole trader who wants to keep a spreadsheet
| Option | Year 1 | Year 2 | Two-year total | Year-end filing | Conditions |
|---|---|---|---|---|---|
| Sage Sole Trader Free | £0.00 | £0.00 | £0.00 | confirmed | Limits: one income source, 25 auto-categorised transactions, 5 invoices/mo. |
| Affordable MTD (bridging) | £0.00 | £19.99 | £19.99 | confirmed | Free for 2026-27. No foreign property. |
| Xero Simple | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months can be withdrawn. 10 invoices/mo. |
| Sage Sole Trader | £55.44 | £100.80 | £156.24 | confirmed | Intro 90% off for 6 months. |
| Coconut Bridging | £99.98 | £99.98 | £199.96 | confirmed | £49.99/yr + £49.99 year-end. |
| QuickBooks Sole Trader Plus | £79.20 | £144.00 | £223.20 | confirmed | |
| Coconut MTD filing | £129.99 | £129.99 | £259.98 | confirmed | Includes year-end. Confirm the price in the app. |
| FreeAgent | £114.00 | £228.00 | £342.00 | confirmed | Annual billing, 50% off the first year. |
| Pandle Free | £0.00 | £0.00 | £0.00 | not stated | MTD IT submissions included. Doesn't say whether the final declaration is included. Bank feeds need Pro (£5/mo + VAT). |
| VitalTax (bridging) | £36.00 | £36.00 | £72.00 | not stated | Unclear whether the year-end declaration is included. |
Limitations
- Coverage: this page compares 13 products we checked on 10 October 2026. It is not a whole-market comparison. Other MTD for Income Tax products exist, some free or cheaper; see HMRC's software finder for the full list.
- Prices are list prices checked on 10 October 2026 on each provider's own page. Offers and prices change; confirm before buying.
- Two-year totals assume the intro offers shown were available when you signed up, and add 20% VAT where the provider quotes ex-VAT and you aren't VAT-registered.
- Free plans have usage limits (transactions, invoices, income sources). Check they fit your volume.
- Information, not tax advice. No provider pays for placement and there are no affiliate links.
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Made by an independent research resource published on chrishayuk.com. Independent: no affiliate links and no paid placement.