Best Free MTD Software for Sole Traders
The honest answer is that genuinely free, full-featured MTD software is rare. But there is one notable exception — and a few options worth knowing about if budget is your primary concern.
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Is There Really Free MTD Software?
The MTD software market is dominated by subscription-based products. Xero, QuickBooks, Sage, and FreeAgent all charge monthly fees for their standard plans. There is no free tier offered by any of these providers for ongoing use — with one important exception.
FreeAgent offers its full platform free of charge to business bank account holders at NatWest and Royal Bank of Scotland (RBS). This is a genuine ongoing benefit — not a time-limited promotion — available to eligible account holders for as long as they maintain their qualifying bank account.
Beyond FreeAgent, your options for reducing cost include free trials (available from all four major providers), very basic bridging tools, and checking HMRC's published list for any newer entrants offering free or very low-cost plans.
FreeAgent via NatWest / RBS
FreeAgent
Accounting built specifically for freelancers and sole traders
From £19/month (sole trader, direct). Free with qualifying NatWest, RBS, Ulster Bank, or Mettle business accounts.
Fully HMRC-recognised for MTD Income Tax. Self-assessment filing is included in all plans — a real differentiator.
FreeAgent is purpose-built for freelancers and sole traders. It includes everything most sole traders need: MTD Income Tax quarterly submissions, self-assessment filing (including the Final Declaration), bank feeds, invoice creation, expense tracking, and a tax timeline dashboard that keeps you on top of upcoming deadlines.
The free access via NatWest and RBS applies to personal (sole trader) and business accounts. If you already bank with NatWest or RBS through a qualifying business account, you can claim free FreeAgent access directly through your online banking portal.
Standalone pricing is £19/month for the sole trader plan — competitive but not the cheapest option if you pay directly. The NatWest/RBS route makes FreeAgent the best value option for qualifying customers by a significant margin.
HMRC's Own Tools
HMRC publishes its own “Basic Tools” for certain tax obligations (primarily payroll). For MTD Income Tax, HMRC has not released its own comprehensive free software, but it does maintain an up-to-date list of recognised products — some of which may offer basic or entry-level free tiers.
Some providers on HMRC's recognised list offer free plans with limited features — for example, supporting submissions only, without bank feeds or invoice management. These may be suitable for sole traders with very simple finances who are confident managing their own records.
Always verify that any tool you rely on is currently on HMRC's recognised list before using it for MTD submissions. The list is updated regularly.
What “Free” Usually Means in Practice
When software providers describe their products as “free,” it usually means one of the following:
Free trial
Full access for a limited period — typically 30 days — at no charge. After the trial ends, a subscription is required. Useful for evaluating software, but not a long-term solution.
Free with a qualifying bank account
FreeAgent's model: the software is bundled with a business bank account. The bank pays for your software access as a customer benefit. You still pay for the bank account itself.
Freemium (limited features)
A basic free plan with significant limitations — e.g. no bank feeds, limited transactions, or submission-only capability. May be adequate for very simple businesses but often lacks the features most sole traders need.
When Free Might Not Be Enough
Very basic or stripped-down MTD tools may be technically compliant but impractical for everyday use. If your software doesn't have bank feeds, you'll need to enter every transaction manually — which quickly becomes time-consuming and error-prone.
Consider paying for full accounting software if any of the following apply:
- You have more than a handful of transactions per week
- You issue invoices to clients regularly
- You have employees or subcontractors to pay
- You need to track project costs or profitability
- You have property income alongside self-employment
- You want your accountant to have direct access to your records
For most active sole traders, the time saved by a full accounting platform (with bank feeds and automation) is worth the subscription cost.
Compare All MTD Software Options
See how free and paid MTD software compares across price, features, and sole-trader suitability.