Making Tax Digital (MTD) has ushered in a new era of digital compliance for UK businesses and landlords. What began as a government initiative to reduce tax errors has now become an essential part of how financial reporting is done. Under MTD, businesses are required to maintain digital records and submit their VAT and Income Tax returns through compatible software, marking a significant shift away from manual spreadsheets and paper-based submissions.
For small businesses and landlords alike, this transition may seem daunting at first — especially for those who have managed their taxes traditionally. However, the right MTD software can completely transform the process. From automating data entry to generating real-time financial insights, these digital tools not only simplify compliance but also improve the way you manage your finances day to day.
As we move towards the end of 2025, the range of HMRC-approved MTD software has grown substantially, offering solutions for every type of business — from property-focused landlords to rapidly scaling startups. Choosing the right one depends on your needs, the complexity of your operations, and how much automation you want in your accounting process.
In this article, we’ll take an in-depth look at the best MTD software in 2025, highlighting standout platforms like RentalBux, QuickBooks Online, Xero, and FreeAgent. You’ll learn how each performs in areas such as compliance, usability, cost-effectiveness, and scalability — helping you make a confident, well-informed decision about which software best aligns with your goals.
Whether you’re a sole trader managing one property or a business owner with expanding operations, this guide will help you understand what makes a great MTD solution — and why choosing the right one could make your tax experience smoother, smarter, and more efficient.
Why RentalBux is the Premier MTD Software for Landlords and Sole Traders
For UK landlords and sole traders, managing property income alongside tax obligations can be complex. RentalBux was designed from the ground up with this unique challenge in mind, making it a specialist tool tailored specifically to the needs of property managers and self-employed landlords. Unlike generalist accounting software, every feature of Rentalbux is built to simplify property management while ensuring full MTD compliance, providing a seamless experience for busy landlords.
MTD Compliance Excellence
Tailored Property Management
What sets RentalBux apart from other accounting tools is its property-centric workflow. Tenancy management, rent collection, mortgage tracking, and expense categorisation are all built directly into the system. Landlords can manage day-to-day property operations and meet tax obligations within a single platform, eliminating the need to juggle multiple apps or spreadsheets.
User Experience and Accessibility
RentalBux is designed to be intuitive for both experienced landlords and newcomers to property management. Clear dashboards, automated notifications, and straightforward tax reporting tools make navigating MTD compliance simple and stress-free, even for those without an accounting background. The software balances functionality with usability, ensuring that compliance doesn’t come at the cost of convenience.
Cost Efficiency
A standout feature for small landlords is RentalBux’s free tier, which grants access for a single property completely free until March 2028. This allows users to explore the software and its features without upfront costs, making it an attractive choice for those just starting out or testing the platform before committing to larger portfolios.
Security and Trust
Security is a top priority for RentalBux. The platform operates on secure cloud infrastructure with enterprise-grade data protection and continuous updates, ensuring compliance with all UK legal and cybersecurity standards. Users can confidently store financial and tenant information, knowing it is protected to the highest standards.
Summary
By combining specialist property management tools with robust MTD compliance features, RentalBux effectively bridges the gap between practical landlord needs and regulatory requirements. For UK landlords and sole traders, it offers a focused, user-friendly, and secure solution that simplifies both property operations and digital tax reporting.
QuickBooks Online: A Comprehensive Accounting Powerhouse for Growing Small Businesses
For small businesses looking for a versatile accounting solution, QuickBooks Online has long been a global leader. Unlike specialist tools like RentalBux, QuickBooks is designed for businesses with diverse needs, offering a wide range of features that extend well beyond basic tax compliance. Its depth and scalability make it an attractive choice for growing companies, multi-income ventures, and businesses with more complex accounting requirements.
MTD Compliance and Integration
Feature-Rich and Scalable
One of QuickBooks’ biggest strengths is its extensive functionality. Users can manage invoicing, inventory, expense tracking, bank reconciliations with AI-driven transaction categorization, and cash flow monitoring, all in one platform. This adaptability makes QuickBooks ideal for businesses expanding across multiple revenue streams or handling multiple types of transactions.
Flexible Plan Options
QuickBooks offers a tiered pricing structure, ranging from Simple Start to Advanced plans, to suit businesses at different stages of growth. Higher-tier plans include advanced reporting, custom user permissions, and priority support—features that are particularly useful for companies with more complex operations or multiple team members managing accounts.
User Experience and Learning Curve
While QuickBooks is highly capable, it comes with a steeper learning curve compared to simpler solutions like RentalBux. New users may need time to familiarize themselves with the interface and advanced functionalities. However, this investment in learning is offset by the breadth of tools and automation that QuickBooks provides.
Third-Party Integrations
QuickBooks’ extensive ecosystem of integrations is another major advantage. It connects with numerous financial apps, CRM systems, e-commerce platforms, and payment processors, enabling businesses to streamline workflows and tailor the software to their unique operational needs.
Customer Support
Support for QuickBooks is robust, with 24/7 live chat and phone assistance, plus a large knowledge base and community forums. Businesses can access guidance quickly, helping to resolve issues efficiently and maintain uninterrupted operations.
Summary
QuickBooks Online is ideal for businesses that require comprehensive accounting tools, extensive automation, and scalable solutions. While it may demand a slightly higher learning effort than niche platforms, its versatility and integration capabilities make it a strong choice for small businesses with complex financial operations or plans for growth.
Xero: Elegant, Scalable Accounting with Team Collaboration Strengths
Xero is a well-established cloud accounting platform renowned for its sleek interface and team collaboration features, making it particularly appealing to small businesses that anticipate growth and value multi-user engagement. Unlike single-focus tools, Xero balances simplicity with sophistication, providing both an intuitive experience for everyday users and advanced capabilities for teams managing more complex financial operations.
Full MTD Support
User-Centered Design
The software’s interface prioritizes ease of use, reducing complexity while still offering comprehensive accounting functionality. Users benefit from real-time bank feeds, invoicing, purchase orders, expense tracking, and customizable reporting tools. These features streamline day-to-day bookkeeping and provide clear insights into financial performance, all while maintaining a polished, user-friendly experience.
Scalability for Growing Teams
One of Xero’s standout advantages is its ability to support unlimited users on higher-tier plans. This makes it ideal for teams, small firms, or mid-sized businesses with multiple collaborators. Additionally, Xero includes project management and job costing tools, allowing businesses to track the profitability of client projects in detail and make informed operational decisions.
Flexible Integrations via App Marketplace
Xero’s extensive app marketplace allows businesses to integrate with productivity tools, payroll systems, payment platforms, and CRM software. This flexibility makes it possible to expand the platform’s functionality to suit specific workflows, whether a company needs advanced reporting, automated invoicing, or seamless integration with third-party services.
Pricing Structure
Xero offers competitive monthly plans tailored to different business sizes—from sole traders to larger enterprises. While costs increase with additional users and advanced features, the platform’s scalability and integration options justify the investment for businesses planning to grow or collaborate extensively.
Summary
Xero is an excellent choice for businesses that prioritize collaboration, multi-user access, and a polished user experience. Its combination of intuitive design, scalable team features, and broad integration options makes it particularly suitable for businesses with growing teams or complex accounting needs, all while maintaining HMRC-compliant MTD processes.
FreeAgent: Simplified Accounting for Freelancers and Sole Traders
FreeAgent is designed with the smallest UK businesses, solo practitioners, and freelancers in mind, offering a streamlined accounting solution without unnecessary complexity. Its focus is on making financial management accessible to users who may not have a formal accounting background, allowing them to handle compliance and bookkeeping efficiently.
MTD Compliance Made Simple
Ease of Use
The platform is exceptionally intuitive, with a user-friendly interface tailored for those unfamiliar with accounting software. It offers automated bank feeds, straightforward expense tracking, invoicing, and basic project tracking. Users can quickly generate profit and loss statements, tax timelines, and simple reports, providing a clear overview of their finances without overcomplication.
Affordable Pricing
FreeAgent uses a single, straightforward monthly fee, making it appealing to cost-conscious sole traders and freelancers. Some UK bank customers even receive FreeAgent access for free, offering an accessible entry point into MTD compliance without requiring a large investment.
Limitations for Larger or Complex Businesses
While FreeAgent excels at simplicity, it is less scalable for businesses with more complex needs. It lacks advanced features such as inventory management, multi-currency support, and detailed payroll, which may be necessary as a business grows or diversifies.
Support and Resources
FreeAgent provides responsive email and phone support, along with an active user community, ensuring that help is available when needed. This support network is particularly valuable for freelancers navigating MTD requirements for the first time.
Summary
FreeAgent is an excellent starting point for sole traders and freelancers who want MTD compliance with minimal fuss. Its simplicity, affordability, and ease of use make it ideal for small-scale operations. However, for landlords or businesses managing multiple properties, its lack of dedicated property management features makes it a less suitable choice compared with solutions like RentalBux.
Comparative Feature Table
With four strong contenders in the HMRC-approved MTD software space, it can be challenging to decide which platform best suits your business needs. While RentalBux excels for landlords and sole traders with property-specific workflows, QuickBooks and Xero cater to growing businesses requiring advanced accounting features, and FreeAgent provides a simple, accessible solution for freelancers. The comparative feature table below highlights key aspects of each platform, including MTD compliance coverage, Automation and Alerts, bank integrations, pricing, and the ideal users , allowing you to quickly see how each solution aligns with your priorities.
| Feature | RentalBux | QuickBooks Online | Xero | FreeAgent |
|---|---|---|---|---|
| Ideal Users | UK landlords, sole traders | Small to growing multi-activity businesses | Small to mid-sized collaborative businesses | Freelancers, sole traders |
| Pricing | Free single property till Mar 2028; scalable thereafter | £10–£115/month, tiered features | £7–£59/month, tiered user limits | ~£10–£33/month, simple tier |
| MTD Compliance | Full VAT & Income Tax incl. foreign property | Full VAT & Income Tax, payroll & CIS | Full VAT & Income Tax | VAT & partial Income Tax |
| Property Management | Full tenancy, rent, mortgage & expense tracking | Limited property features | Limited property features | None |
| Bank Integration | Full bank sync & categorization | Advanced AI-driven bank reconciliation | Real-time bank feeds | Automated bank feeds |
| Automation & Alerts | Automated MTD reporting and alerts | Extensive automation & reporting | Automated accounting and payroll | Simplified bookkeeping |
| Multi-Users & Collaboration | Single user focus, scalable | Multi-user on advanced plans | Unlimited users/high tiers | Single user focus |
| Security & Compliance | Enterprise-grade data security | Industry-standard data security | Strong compliance and security | HMRC approved; secure |
| Learning Curve & Support | Easy onboarding, landlord-centric | Moderate learning curve, 24/7 support | User-friendly, standard office hours support | Very intuitive, good customer service |
The comparative table makes it clear that no single platform fits every business perfectly. RentalBux stands out for property-focused landlords, combining full MTD compliance with tenancy and expense management in one place. QuickBooks and Xero shine for businesses that need advanced accounting features, multi-user capabilities, and flexible integrations. FreeAgent is ideal for solo traders and freelancers seeking simplicity and affordability. By reviewing these features side by side, you can make a confident choice that balances compliance, functionality, and cost, ensuring your business is fully prepared for Making Tax Digital in 2025 and beyond.
Practical Considerations When Using MTD Software
Choosing the right MTD software goes beyond features and pricing—it’s also about how the software fits into your day-to-day operations. Even the most powerful platform will only be effective if it aligns with your workflow, integrates smoothly with other systems, and supports your broader financial processes.
Onboarding and Setup: Consider how easy it is to get started. RentalBux offers property-focused templates and pre-configured workflows, helping landlords hit the ground running. QuickBooks and Xero provide guided setup processes for businesses of all sizes, though some initial time investment may be required to configure multi-department or multi-entity accounts. FreeAgent’s simplicity makes setup fast and straightforward, particularly for sole traders and freelancers.
Integration with Existing Tools: Many small businesses and landlords use a variety of tools for banking, invoicing, payroll, and property management. Check whether your MTD software integrates directly with these systems. RentalBux combines tenancy and accounting functions in a single platform, while QuickBooks and Xero support a broad ecosystem of third-party integrations for businesses with diverse workflows.
Support and Learning Resources: Access to training materials, knowledge bases, and customer support is essential for smooth adoption. RentalBux provides landlord-focused guidance, QuickBooks and Xero offer extensive tutorials and dedicated support, and FreeAgent has responsive support tailored to freelancers. Choosing software with strong support reduces the risk of errors during submissions.
Automation and Alerts: Look for tools that automate repetitive tasks and provide alerts for key deadlines. Automatic VAT calculations, reminders for quarterly ITSA updates, and bank reconciliation notifications can prevent late submissions and costly mistakes. RentalBux and other major platforms provide these features, helping users stay on top of compliance without manual tracking.
By considering these practical factors alongside feature comparisons, you can ensure that the software you choose not only meets your technical needs but also integrates seamlessly into your workflow, maximising efficiency and compliance confidence.
Choosing the Best MTD Software for Your Business
Selecting the right Making Tax Digital software depends on your specific business needs, operational complexity, and long-term goals.
- Focus of Your Business: If property management forms the core of your income, RentalBux’s tailored features make it a natural choice. Its tools simplify landlord-specific tasks, combining tenancy management, rent collection, and tax compliance in one intuitive platform.
- Business Size & Scope: For businesses with multiple income streams or larger teams, QuickBooks or Xero offer scalable solutions and more advanced reporting capabilities. While these platforms provide extensive functionality, they come with additional complexity and cost.
- Budget Considerations: RentalBux’s free tier for single-property landlords remains unmatched in affordability, allowing users to start MTD compliance without upfront investment. QuickBooks and Xero charge ongoing fees that increase with added users or advanced features, while FreeAgent offers an economical option for sole traders seeking simplicity.
- Ease of Use: RentalBux and FreeAgent prioritise user-friendliness, keeping the learning curve low for new users. QuickBooks and Xero, while powerful, require more onboarding time but reward businesses with extensive automation and multi-user management capabilities.
- Compliance Coverage: Ensure your chosen software fully covers your MTD obligations for VAT and Income Tax, particularly if you manage foreign property income or have staff. Choosing a system that aligns with your compliance needs reduces errors and saves time during submissions.
Conclusion: Choosing the Best MTD Software for Your Business
For UK landlords and sole traders, RentalBux remains the standout solution, offering a seamless combination of MTD compliance and property management. Its tailored workflows, intuitive interface, and free access for single-property users until 2028 make it particularly attractive for property professionals who want to streamline their accounting without compromising on accuracy or efficiency.
Meanwhile, QuickBooks Online and Xero continue to shine as versatile platforms for businesses with broader or more complex accounting needs. Their rich feature sets, multi-user support, and integration capabilities make them ideal for growing businesses managing multiple revenue streams or teams. FreeAgent, on the other hand, remains a solid choice for sole traders and freelancers who prioritise simplicity and cost-effectiveness, though it lacks landlord-specific functionality.
Ultimately, the key to success lies in matching your business priorities, scale, and budget to the right software. By considering your workflow, compliance needs, and long-term growth plans, you can confidently adopt an MTD-compliant solution that reduces errors, saves time, and gives you better control over your finances.
This comparison aims to guide you toward a software choice that not only meets HMRC requirements but also supports smoother operations, smarter financial management, and less stress throughout your business journey.