What's the cheapest software I can use for Making Tax Digital? What is the best value software can I use for Making Tax Digital for Self Assessment? How do a file a tax return under Making Tax Digital?

We compare the pricing and capabilities of software that will enable you to file your five tax returns per year under Making Tax Digital.

  • From April 2024, sole traders and landlords will move into the next phase of Making Tax Digital for Income Tax. The change will require business owners to submit their accounting data to HMRC using 'functionally compatible' software.
  • This change comes at quite a cost as it means that many business owners will need to start to do their own bookkeeping in real-time, as opposed to handing their accountant or bookkeeper a large bag of receipts at the end of each year. 
  • Returns have to be filed on a quarterly basis: the data transmitted may be only in a simple three-line format, however, most software will analyse your data into standardised accounting headers for different types of income and expense.

As of 9 August 2022 seven companies are listed by HMRC as compatible for Making Tax Digital for Income tax

It is optional for taxpayers to join the MTD pilot scheme: you can still use the software without taking part in the pilot.

  Bank feed Cost
Apari Yes £ 143.88  (£251.88 with phone support)
Cirrostratus Yes MTD enabled Cloud Cashbook - free
untied Yes £99.99 (£49.99 for manual entry)
Xero Yes £156 (£124 for manual bank entry)
123 Sheets No From £19.75 - bridging software.
Sage Tbc Tbc
Vital Tax No Free - bridging software

 

Useful guides on this topic

Making Tax Digital for Income Tax: Data required by HMRC
Making Tax Digital for Income Tax: the schedule and likely categories of information.

MTD: Income Tax Pilot Tool
Making Tax Digital (MTD) for Income Tax. Are you eligible to take part in the MTD Pilot?

MTD: Toolkit for accountants
What is the current timetable for Making Tax Digital (MTD)? How will it work? Which clients will be excluded? What planning needs to be undertaken?  

Making Tax Digital: Survival guide (for the self-employed & landlords)
A guide for the many self-employed taxpayers, company owners and property landlords who are unaware of HM Revenue and Custom's radical plans to transform the tax online filing system. 


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