Choosing the right platform is essential. Not just for compliance, but to reduce admin, avoid errors, and simplify bookkeeping throughout the year. Below, we compare four of the leading MTD‑compatible accounting tools.

1. Xero

Pricing

Prices for IGNITE plans start from £16 per month + VAT on their website, however they are running a 95% off for your first 6 months promotion, which expires 31 March 2026.

Pricing plan here - Pricing Plans | Xero UK

Key Features

Xero offers a comprehensive cloud‑based accounting platform with strong bank feed connectivity, real‑time reporting, and fully digital record‑keeping. It is HMRC‑recognised for both VAT and Income Tax submissions.

The software includes robust automation tools such as bank reconciliation, CIS calculations, VAT submissions, document capture through Hubdoc, and customisable dashboards, all designed to give users a complete view of their financial position.

2. QuickBooks Online

Pricing

Prices for SOLE TRADER plans start from £10 per month + VAT , however they are running a 90% off for your first 12 months promotion, which expires 31 March 2026.

Pricing plan here - QuickBooks Pricing & Costs | QuickBooks UK

Key Features

QuickBooks provides a full bookkeeping and financial management platform, offering tools for invoicing, VAT submissions, cash‑flow monitoring, and automated expense categorisation. It is compatible with MTD for VAT and ITSA and includes guided prompts to help users navigate digital submissions.

The platform also integrates with payroll systems and payment processors, giving small business users a complete financial workflow.

3. Sage Accounting

Pricing

Prices for SOLE TRADER are £7 per month + VAT, with a 90% off for 6 months promotion currently live on their website. SOLE TRADER FREE is, yup, you guessed it, FREE! This comes with limited user capabilities and manual data entry.

Pricing plan here - Self-Employed Accounting Software | Sage UK

Key Features

Sage Accounting provides a reliable cloud‑based system focused on ease of use, clarity, and strong reporting capabilities. It is approved for MTD VAT and ITSA submissions and supports automated invoicing, bank feeds, expense tracking, and VAT calculations.

Sage is known for its predictable workflows and solid core functions, making it ideal for small businesses that want a dependable system without unnecessary complexity.

4. FreeAgent

Pricing

Prices start from £16.50 per month + VAT, with many users qualifying for a free account when using certain UK business bank accounts.

Pricing plan here - Simple pricing plans made for every small business - FreeAgent

Key Features

FreeAgent is a newer and smaller competitor in the accounting software market compared to Xero, QuickBooks, and Sage. It is designed specifically for freelancers, sole traders, and landlords, offering an extremely user‑friendly interface that minimises accounting jargon.

Features include automated expense capture, invoicing tools, real‑time tax forecasting, mobile‑first bookkeeping, and direct submissions for VAT and Self Assessment. FreeAgent focuses on simplicity and clarity, making it an excellent choice for individuals and micro‑businesses.

So, which one should I choose?

If your business is straightforward with low to moderate transactions, FreeAgent’s simpler design may suit you best, especially for freelancers and landlords.

Xero, Quickbooks & Sage are a good fit if you expect your business to grow and need more advanced features and automation, for tasks such as VAT and Payroll compliance.

Whilst price might be a big factor, ensuring the software matches your needs, expectations, and works smoothly with your accountant is crucial.

If you’d like help choosing the right software or getting fully set up for MTD for ITSA, feel free to get in touch.