The cheapest Making Tax Digital software is the one that fits how much you file.
A subscription costs the same whether you file once or every month. A per-submission price rises with your filings, up to a cap. Here is where each comes out cheaper.
Worked out, not guessed
Checked 1 October 2026
Free options named
FileThat at 4, 8 and 12 submissions a year
Four is a sole trader's quarterly updates. Eight adds four VAT returns, or a second business such as a rental. Twelve is both. The final declaration is free on top, and so is a NIL VAT return.
| Paid submissions a year | At £3.99 | At £4.99 | At £5.99 |
|---|---|---|---|
| 4 submissions | £15.96 | £19.96 | £23.96 |
| 8 submissions | £31.92 | £39.92 | £47.92 |
| 12 submissions | £47.88 | £54.89 | £53.91 |
At 12 submissions the £50 cap starts to count: once you have paid £50 in a tax year, everything else is free, so no one pays more than £55. Subscriptions charge the same at any volume.
Against the subscriptions
| Software | How you pay | A year, sole trader (4 updates) | A year, VAT registered (4 updates and 4 VAT returns) |
|---|---|---|---|
| FileThat | £3.99 to £5.99 per submission, set by your income. Final declaration and NIL VAT returns free. At most £55 a year. | £15.96 to £23.96 | £31.92 to £47.92 |
Xero Ignite Checked 1 October 2026, Xero pricing | £18 a month plus VAT, after 90% off for the first 6 months | £259.20Ignite | £259.20Ignite |
FreeAgent Sole Trader Checked 1 October 2026, FreeAgent pricing | £190 a year plus VAT (or £19 a month), after 50% off for the first 6 monthsFree while you have a NatWest, Royal Bank of Scotland or Ulster Bank business current account, or a Mettle account with at least one transaction a month | £228.00Sole Trader | £228.00Sole Trader |
GoSimpleTax Making Tax Digital Checked 1 October 2026, GoSimpleTax pricing | £12.99 a month, signed up through Coconut | £155.88Making Tax Digital | £213.77Making Tax Digital plus MTD VAT |
QuickBooks Sole Trader Plus Checked 1 October 2026, QuickBooks pricing | £10 a month plus VAT, after 90% off for the first 6 months | £144.00Sole Trader Plus | £230.40Simple Start |
untied MTD plan Checked 1 October 2026, untied pricing | £129.99 a year | £129.99MTD plan | Does not file VAT |
Sage Sole Trader Checked 1 October 2026, Sage pricing | £7 a month plus VAT, after 90% off for the first 6 monthsSole Trader Free: one bank account, five sales invoices a month and 25 auto-categorised transactions, for sole traders who are not VAT registered | £100.80Sole Trader | VAT is on another plan, not priced here |
Regular prices, including VAT where the provider quotes without it. A VAT-registered business not on the Flat Rate Scheme can usually reclaim that VAT.
Free Making Tax Digital software
FreeAgent through your bank
Free while you have a NatWest, Royal Bank of Scotland or Ulster Bank business current account, or a Mettle account with at least one transaction a month
Sage Sole Trader Free
Sole Trader Free: one bank account, five sales invoices a month and 25 auto-categorised transactions, for sole traders who are not VAT registered
Bridging software
If your records are already in a spreadsheet, bridging software sends the figures to HMRC. Some is free for VAT, and FileThat bridges both VAT and Income Tax.
Your accountant
If an accountant files for you, the software is usually part of their fee, and you may not need your own at all.
Keeping figures in a spreadsheet? See MTD bridging software.
Straight answers
What is the cheapest MTD software for a sole trader?
If you get FreeAgent free through your bank, that. Otherwise, for four quarterly updates a year, FileThat costs £15.96 to £23.96 depending on your income, less than any of the paid subscriptions we compare, which run from about £100 to over £250 a year with VAT.
Is there free Making Tax Digital software?
Yes, with conditions. FreeAgent is free with some business bank accounts, and Sage has a free plan for sole traders who are not VAT registered, limited to one bank account and five sales invoices a month. Some bridging software is free for VAT returns.
When does a subscription work out cheaper than paying per submission?
Only when the subscription is cheaper than £55 a year, because that is the most FileThat can charge in a tax year. None of the paid plans we compare is. A free plan, or free software through your bank, is cheaper.
Does the final declaration cost extra?
Not on FileThat: final declarations, annual submissions, amendments and NIL VAT returns are free. The subscriptions we compare include the final declaration in their monthly price, so it does not cost extra there either.
What counts as a submission?
On FileThat, a new quarterly update or a VAT return that is not a NIL return. Each business sends its own quarterly updates, so a sole trader who also lets a property makes eight a year. Nothing else uses a credit.
Pay only for what you file
4 free credits, no card needed. No subscription, and never more than £55 in a tax year.
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