MTD for Income Tax starts 6 April 2026.
Ten days. If you are a UK sole trader earning over £50k, you need to be filing quarterly digital records.
The good news: you do not need to pay £30/month for Xero or QuickBooks.
Here is the honest breakdown.
What MTD actually requires you to do
- Keep digital records of income and expenses
- Submit quarterly updates to HMRC (April, July, October, January)
- File a final declaration at year end
That is it. No fancy reports. No payroll integration. Just: income in, expenses out, submit four times a year.
Software options (honest comparison)
Free options:
- HMRC's own free software list — exists, mostly rubbish, but some are legitimately free for simple sole traders
- Hammock — free tier for freelancers, MTD-compatible
- Coconut — free plan available, designed for self-employed
- Countingup — app-based, includes bank account, MTD-ready
Paid but cheap:
- FreeAgent — £19/mo (often free if you bank with NatWest/RBS/Mettle)
- Pandle — from £5/mo, simple UI, MTD-compliant
- TaxCalc — one-off fee model, popular with sole traders who hate subscriptions
The expensive ones (probably overkill for sole traders):
- Xero — £16-47/mo. Good software, far more than most sole traders need.
- QuickBooks — similar. Built for bigger businesses.
- Sage — same story.
The actual decision framework
If your income is simple (one income stream, basic expenses): Free software is fine. HMRC's list, Coconut, or Hammock.
If you have multiple clients, track lots of expenses, or do invoicing: FreeAgent or Pandle. Pay for the time it saves.
If you already use a bank that gives you free FreeAgent: Use FreeAgent. Stop looking.
If you are still using spreadsheets: You need to switch before April. Spreadsheets are not MTD-compatible unless you bridge with specific software.
What people get wrong
"I'll wait until I get a fine."
HMRC's penalty system for MTD is points-based. Miss a quarterly submission: 1 point. Reach 4 points: £200 fine. Then £200 for every subsequent failure. It compounds.
"I'll use bridging software."
Bridging software lets you submit from a spreadsheet. It is technically compliant. It is also more faff than just using proper software from the start.
"My accountant will handle it."
Your accountant can submit on your behalf, but you are still responsible for keeping digital records throughout the year. It is not something you hand off at year end anymore.
The 10-day checklist
- [ ] Confirm whether you are in scope (£50k+ turnover in 2024-25)
- [ ] Pick software (use the list above)
- [ ] Set up your software and connect to HMRC
- [ ] Import or enter your year-to-date records
- [ ] Know your first quarterly deadline: 5 August 2026 (for April-June quarter)
If you want a fuller checklist with the exact HMRC steps: landolio.com/mtd-readiness-toolkit — £14, covers setup through first quarterly submission. Or use the free MTD checker first if you are not sure whether you are in scope.
Ten days is enough time to sort this. The software setup takes about 20 minutes once you have picked one.
Do not leave it to the weekend before.
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