The Best Free HMRC-Approved MTD Software in 2025
The introduction of Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) has made tax submission more complex and expensive than ever. What once cost just a few hundred pounds can now easily run into thousands when you factor in ongoing software subscriptions, accountant fees, and digital record-keeping requirements.
But here’s the good news: several HMRC-approved MTD software solutions provide everything you need for free.
In this blog post, you will get a detailed breakdown of each of the free HMRC-approved MTD software. Plus, we’ve included a summary table at the end to help you quickly compare the software and choose the best fit.
Sounds fair! Let’s start with the first software.
1. @Coconut
Coconut is an invoicing and expense management platform that also provides features for MTD compliance. It solves the problem of expensive accounting software by providing essential MTD functionality for free to accountants with a simple mobile-first approach. It stands out for its focus on real-time financial tracking, automatic bank integration, and intelligent transaction categorisation that puts professional-grade accounting in everyone’s pocket.
Key Details
- Best For: Sole traders and landlords
- Data Security Accreditation: GDPR compliant with bank-level security standards
- Mobile App: Available for iOS and Android
- Income Types Supported: Self-employment income, UK property income, foreign property income
Key Features for MTD
- MTD for Income Tax Ready: Built specifically for MTD requirements with quarterly updates and year-end submissions
- Real-time Bank Integration: Connect over 25 different bank accounts via Open Banking for automatic transaction imports
- Digital Record-Keeping: Secure cloud storage for all business paperwork with photo receipt capture
- Automatic Transaction Categorisation: Smart categorisation with guidance on allowable business expenses
- Quarterly MTD Submissions: Submit required quarterly updates directly to HMRC through MTD API
- Real-time Tax Calculations: Live tax estimates showing how much to set aside throughout the year
2. Clear Books Free
Clear Books Free is the no-cost version of Clear Books accounting software. This software is particularly designed for small sole traders and property businesses that need basic digital record-keeping and tax-filing capabilities without ongoing costs. It stands out for its provision of genuine compliance features without feature restrictions or time limits. It provides all the core MTD functionality as paid alternatives for free while still maintaining professional standards and HMRC recognition.
Key Details
- Best For: Sole traders, small businesses, budget-conscious property investors
- Data Security Accreditation: Accredited by The Institute of Certified Bookkeepers and registered with the Financial Conduct Authority
- Mobile App: Limited mobile access compared to the paid version
- Income Types Supported: Self-employment income, UK property income
Key Features for MTD
- Free MTD Compliance: Complete MTD for Income Tax and VAT compliance at no cost with no time restrictions
- Digital Record Creation: Essential digital record-keeping capabilities for MTD compliance requirements
- Quarterly Update Submissions: Submit required quarterly MTD updates directly to HMRC
- Basic Tax Return Support: Fundamental tax return preparation capabilities for year-end compliance
- Bank Feed Integration: Essential bank connectivity for automatic transaction imports
- Compliance Reporting: Basic financial reporting tools to support MTD submission requirements
3. FreeAgent
FreeAgent is a cloud-based accounting software particularly designed for small businesses. It offers free access to its comprehensive accounting software for small businesses, sole traders, and freelancers who bank with participating institutions like NatWest, Royal Bank of England, Ulster Bank, or Mettle.
Key Details
- Best For: Small businesses, sole traders, freelancers with eligible bank accounts
- Data Security Accreditation: Bank-level security with Open Banking compliance and GDPR standards
- Mobile App: Available for iOS and Android
- Income Types Supported: Self-employment income, UK property income
Key Features for MTD
- Complete MTD for Income Tax Support: Submit quarterly submissions and final declarations directly to HMRC
- MTD VAT Compliance: HMRC-recognised VAT return submissions with direct filing capability
- Open Banking Integration: Sync with most UK banks for real-time transaction imports and reconciliation
- AI-Powered Smart Capture: Automatic data extraction and transaction categorisation from receipts
- Real-time Tax Timeline: Track what tax you owe and when it’s due with automatic calculations
- Integrated Payroll Management: Complete payroll processing with RTI submissions and pension contributions
4. PaTMa Property Manager
PaTMa Property Manager is a UK landlord-focused property management software that combines management, accounting, and MTD compliance all in one place. It provides UK landlords with specialised features like tenancy tracking, compliance reminders, and property-specific accounting that major accounting software lacks. It offers a completely free plan for managing one property.
Key Details
- Best For: Landlords, small property investors, first-time property managers
- Data Security Accreditation: Open Banking integration with secure cloud-based storage
- Mobile App: Not specified
- Income Types Supported: UK property income
Key Features for MTD
- Free Property MTD Compliance: Digital record-keeping that automatically prepares for MTD submissions
- Open Banking Integration: Direct bank connection for automatic property transaction syncing
- Simplified Property Bookkeeping: No double-entry required, simply record property income and expenses
- Compliance Automation: Step-by-step guides and automated reminders for property compliance requirements
- One-Click Tax Reporting: Generate property tax return reports instantly from existing records
- Integrated Property Management: Handle tenancy details, maintenance tracking, and financial records in one platform
5. QuickFile Accounting Software for MTD IT
QuickFile provides a fully-featured MTD Income Tax solution for free to self-employed individuals, landlords and businesses with up to 1000 ledger entries. It supports everything from digital record keeping and quarterly submission to year-end accounting adjustments and final declaration. It is best known for its generous free tier and its official participation in HMRC’s MTD for ITSA pilot scheme.
Key Details
- Best For: Sole traders, small businesses, freelancers, budget-conscious entrepreneurs
- Data Security Accreditation: Bank-level security with SSL encryption and secure data centres
- Mobile App: Available for iOS and Android
- Income Types Supported: Self-employment income, UK property income
Key Features for MTD
- MTD ITSA Pilot Participation: Official participation in HMRC’s MTD for Income Tax pilot scheme from April 2025
- Free Quarterly Submissions: Submit cumulative quarterly updates, including income and expenses, to HMRC
- Final Declaration Support: Complete end-of-year submissions, including additional income sources
- Digital Record Maintenance: MTD-compliant digital record-keeping with automatic categorisation
- Multi-Income Source Management: Handle both self-employment and property income within one free platform
- Bank Integration: Connect bank accounts for automatic transaction imports and reconciliation
6. Self Assessment Direct
Self Assessment Direct is a bridging software that provides genuine MTD compliance capabilities like quarterly submissions, tax returns and multiple income source support at zero cost forever. This software supports all forms of income, including self-employment, UK property, and foreign property, and is best suited for sole traders, landlords, and small business owners.
Key Details
- Best For: Sole traders, landlords, self-employed individuals, budget-conscious investors
- Data Security Accreditation: HMRC-recognised software with standard security compliance
- Mobile App: Not specified
- Income Types Supported: Self-employment income, UK property income, foreign property income
Key Features for MTD
- Completely Free MTD Compliance: Full MTD for Income Tax functionality, including quarterly updates at no cost
- Comprehensive Digital Record-Keeping: Complete digital record capabilities for all income sources and MTD compliance
- Free Bridging Software: Connect existing records and spreadsheets to HMRC systems for digital submission
- Multi-Income Source Support: Handle sole trader, UK property, and foreign property income at no cost
- Free Quarterly Submissions: Submit required quarterly updates to HMRC for MTD compliance
- Complete Tax Return Integration: Full tax return preparation and submission capabilities included
7. TaxNav
TaxNav was developed by the team that created VAT. It provides a simple, browser-based operation platform without requiring users to install any software, undergo training, or pay subscription fees. Additionally, it provides a guided submission process, making the software an ideal choice for non-accountants as well.
Key Details
- Best For: Self-employed individuals, landlords, and tax agents seeking simple solutions
- Data Security Accreditation: HMRC-recognised with secure data protection and privacy controls
- Mobile App: Browser-based, accessible on any device with an internet connection
- Income Types Supported: Self-employment income, UK property income, foreign property income
Key Features for MTD
- Free HMRC-Recognised MTD Compliance: Officially recognised as fully compliant software for Making Tax Digital for Income Tax
- No-Installation Browser Access: Complete MTD functionality through a web browser without software downloads
- Guided Submission Process: Expert-guided workflows that remove complexity and unnecessary information
- Free Multi-Income Source Support: Handle both self-employment and property income submissions at no cost
- Expert Development Heritage: Built by professionals who developed MTD for VAT with extensive compliance experience
- Comprehensive Transaction Management: Detailed view and download capability of all income and expense transactions
Free HMRC-Approved MTD Compatible Software Summary Table
| Software Name | Type of Software | Submission Type | Best For | Income Types Supported |
| @Coconut | Software that creates digital records, software that connects to your records (bridging software) | Quarterly updates, Tax return | Self-employed, landlords | Self-employment income, UK property income, Foreign property income |
| Clear Books Free | Software that creates digital records | Quarterly updates, Tax return | Sole traders, small businesses | Self-employment income, UK property income |
| FreeAgent | Software that creates digital records | Quarterly updates, Tax return | Self-employed, small enterprises with eligible bank accounts | Self-employment income, UK property income |
| PaTMa Property Manager | Software that creates digital records | Quarterly updates | Landlords, property investors | UK property income |
| QuickFile Accounting Software for MTD IT | Software that creates digital records | Quarterly updates, Tax return | Self-employed, small businesses | Self-employment income, UK property income |
| Self Assessment Direct | Software that creates digital records, software that connects to your records (bridging software) | Quarterly updates, Tax return | Self-employed, landlords | Self-employment income, UK property income, Foreign property income |
| TaxNav | Software that creates digital records, software that connects to your records (bridging software) | Quarterly updates, Tax return | Self-employed, landlords | Self-employment income, UK property income, Foreign property income |
Conclusion
There’s no doubt that MTD compliance can be expensive, but you can cut costs significantly by using free and reliable software solutions.
HMRC has published a list of approved tools that are completely free to use. We’ve reviewed them all and compiled the key details, supported income types, and MTD-specific features to help you choose the one that best fits your needs. Remember, the MTD deadlines are approaching fast, and now is the best time to get started. So, pick your software, set up your digital records and save yourself both money and last-minute stress when compliance becomes mandatory.
RentalBux
The all-in-one property management and accounting software designed to simplify landlords’ and property managers' lives. It is also MTD-compliant.