Making Tax Digital – which software should you use?
Making Tax Digital (MTD) for Income Tax is now in force for many self-employed individuals and landlords, making it increasingly important to review how records are maintained and submitted to HMRC.
Since 6 April 2026, taxpayers with qualifying business or property income over £50,000 have been required to keep digital records and submit quarterly updates to HMRC using compatible software. The threshold is due to reduce to £30,000 from April 2027 and to £20,000 from April 2028, bringing many more taxpayers into scope.
Although quarterly submissions are now required, taxpayers must complete an annual year-end declaration within their MTD-compatible software; and a separate self-assessment submission, as usual, by the following 31 January.
Choosing the right MTD software
Choosing software for MTD should be about more than compliance alone. The right solution can help reduce administration, improve record keeping and provide greater visibility over financial performance.
Your software should be able to:
• Maintain compliant digital records
• Submit quarterly updates directly to HMRC
• Support the final year-end declaration process
• Integrate with existing bookkeeping processes where appropriate
In our experience, ease of use and how well software fits existing processes are often just as important as functionality.
What software options are available?
There is no single solution that suits everyone and the most appropriate option will depend on the complexity of your circumstances and reporting requirements.
Cloud accounting software
Cloud accounting platforms are often suitable for taxpayers looking for wider functionality alongside MTD compliance.
Examples include:
• FreeAgent
• Xero
• QuickBooks
• Hammock
• Sage
These platforms may offer additional features such as bank feeds, invoicing, receipt capture and reporting tools.
Spreadsheet and bridging software
For taxpayers who prefer to continue using spreadsheets, HMRC allows this approach provided records are linked through compatible bridging software.
This may suit those with simpler requirements or existing spreadsheet-based processes.
Which option is right for you?
When selecting software, consider:
• Whether you need software purely for MTD compliance or wider accounting functionality
• How records are currently maintained
• Whether multiple users need access
• Whether automation could reduce administration
• How your requirements may change over time
Reviewing software early can make the transition to MTD smoother and help avoid unnecessary disruption later.
How we can help
Selecting the right software can feel overwhelming given the number of available options.
We can help assess your current processes, explain your MTD obligations and recommend software solutions that are appropriate for your circumstances and future requirements. Contact us below to get in touch with one of our experts.