How much does Making Tax Digital software cost sole traders and landlords?

It can cost nothing or several hundred pounds a year. In October 2026 GOV.UK's finder listed free versions, some bridging tools cost under £30 in their first year, and Taxfix's managed service cost £39.99 a month including VAT.

Making Tax Digital for Income Tax (MTD) means keeping digital records and using software to send HMRC an update every quarter, then your tax return. GOV.UK publishes no prices. Its guidance, updated 13 July 2026, says "free products are available for those with simple tax affairs", that there may be limits such as a set number of transactions, and that HMRC does not recommend any product or software provider. On 16 October 2026 our MTD software census counted 171 products on HMRC's finder, 37 of them with a free version marked ready now.

The four price bands

• Free versions and bridging tools. Bridging software sends figures from a spreadsheet you already keep. You do the bookkeeping and press send.
• Bookkeeping apps. Software that creates your records, often from a bank feed. A monthly or yearly subscription, and you still send the updates.
• Managed services. Someone prepares and sends the updates and tax return, and you confirm the figures.
• Accountancy firms. Sleek's fee guide, updated 11 September 2026, says sole traders typically pay £200 to £350 plus VAT for a Self Assessment return. That is the annual return only; the guide does not price quarterly updates.

Listed prices, October 2026

Each competitor price is as the provider's own website showed it on the date given. Prices change often, and several are first-year offers.

Our own prices, for comparison. Neither plan is open yet.

Costs that are easy to miss

• VAT on top. FreeAgent's £19 a month plus VAT is £22.80 with it. Hammock's £8 plus VAT is £9.60.
• Offers that end. Xero's £1.80 a month lasts 6 months, then it is £18 plus VAT. LandlordFile goes from £19 to £29 in year two. 123 Sheets does not show its price after the first-year discount.
• The tax return. GOV.UK says you use your MTD software to send your tax return, due by 31 January after the tax year. Coconut's bridging plan charges £49.99 extra for it, and on 16 October 2026 Starling still listed its year-end tax return as coming soon.
• Per-submission fees and bank feeds. On 15 October 2026 Landlord Studio MTD Go was free for 1 to 3 units with manual tracking, plus £5 for each MTD submission, VAT not stated. Its Pro plan adds bank feeds, but on 16 October 2026 its page showed two different prices for Pro, so check first.
• VAT returns. HMRC's developer guide says there is no expectation that a free product will include VAT. Starling Accounting Plus adds VAT returns at £7 a month until April 2027, then £14, VAT not stated. Our VAT returns add-on for trades is £10 a month including VAT, and is not open yet.
• Your time. With software you keep every record yourself and send four updates and a tax return each year. GOV.UK says your programs must be digitally linked, with no copy-and-paste of records already sent.

Where each option fits

If you keep a tidy spreadsheet and are happy to send the updates yourself, a bridging tool such as 123 Sheets or LandlordFile costs much less than a managed service. If you have a NatWest, RBS or Ulster Bank business current account, FreeAgent is free while you keep it; with Mettle, FreeAgent said you need at least one transaction a month. If you would rather not do the work, compare managed prices. Pie listed its MTD Package at £199 a year on 15 October 2026, VAT not stated, and Taxfix listed MTD Full Support at £39.99 a month including VAT on the same day. Our Trades Tax plan is £350 a year including VAT, and is not open yet.

What this means for you

Compare a yearly figure including VAT, using the price after any first-year offer, and check it covers all four quarterly updates and your tax return. If your 2025-26 qualifying income was over £30,000, MTD starts for you on 6 April 2027. Your first update covers 6 April to 5 July 2027 and is due by 7 August 2027, so choose before then.

A lower price usually means more of the work is yours: the bookkeeping, the checks and pressing send. Decide first how much of that you want to do.

Steps to work out your real cost

1. Use the free MTD check to confirm whether and when MTD applies to you.
2. List your income: each trade and let property, any CIS deductions, and whether you are VAT-registered.
3. Shortlist two or three products on GOV.UK's finder that cover every income source and the tax return.
4. Turn each price into a yearly figure including VAT, after any introductory offer ends.
5. Add the extras: the year-end return, bank feeds, VAT returns and any per-submission fees.
6. Weigh the cash cost against the time you will spend on four updates and a tax return.

There are more guides in the trades section and the landlord section.