MTD for ITSA Software Compared: What Sole Traders and Landlords Actually Need in 2026

MTD for ITSA is live. Since 6 April 2026, sole traders and landlords earning over £50,000 have been required to keep digital records and submit quarterly updates to HMRC using compatible software. The first quarterly deadline is 5 August 2026.

If you have not chosen your software yet, you are not alone. HMRC lists over 30 compatible providers, and the differences between them are not always obvious from a features page. This guide cuts through the noise and compares the options that matter for UK sole traders and landlords, with honest assessments of what each does well and where they fall short.

What MTD software actually needs to do

Before comparing specific tools, it is worth being clear about the minimum requirements. HMRC-compatible MTD for ITSA software must:

• Maintain digital records of income and expenses, either through manual entry, bank feeds, or receipt capture
• Submit quarterly updates to HMRC via the MTD API (four per year, covering each quarter of the tax year)
• File an End of Period Statement (EOPS) confirming that the records for the year are complete
• Submit a Final Declaration replacing the old Self Assessment return, due by 31 January

Beyond compliance, the practical question is how much of your bookkeeping the software handles for you. Some tools are essentially digital ledgers where you type everything in. Others pull bank transactions automatically and categorise them. The gap in daily effort is significant.

The major options compared

FreeAgent

Best for: Sole traders who bank with NatWest, RBS, or Mettle.

FreeAgent is a full accounting platform that covers invoicing, expenses, bank reconciliation, VAT, and MTD quarterly submissions. It is mature, well-designed, and has been handling MTD for VAT since 2019, so the quarterly submission workflow is well-tested.

The standout feature is the price: it is completely free if you hold a business account with NatWest, RBS, or Mettle. That means the full product — not a limited tier — at no cost. For sole traders in that banking group, it is hard to justify paying for anything else unless you have specific needs FreeAgent does not cover.

The downsides: FreeAgent is designed for sole traders and small limited companies. If you are a landlord with multiple properties, the property-specific features are thin. There is no portfolio-level reporting or mortgage tracking. And if you do not bank with the NatWest group, the standard pricing (around £25/month) puts it in the same bracket as competitors with broader features.

Xero

Best for: Sole traders whose accountant already uses Xero, or those who want the widest range of integrations.

Xero is the most widely used cloud accounting platform among UK accountants. If your accountant is managing your MTD submissions, there is a good chance they are already on Xero. The app marketplace is enormous — hundreds of add-ons for everything from receipt capture to inventory management.

For MTD for ITSA, Xero supports quarterly submissions, bank feeds from most UK banks, and automatic transaction categorisation that improves over time as you correct its suggestions. The mobile app is solid for capturing receipts on the go.

The downsides: Xero is not cheap. The Starter plan (£15/month) limits you to 20 invoices and 5 bank reconciliation transactions per month — too restrictive for most sole traders. The Standard plan (£30/month) removes those limits. If you are a sole trader with simple needs, you are paying a premium for features you may not use. Xero is also not purpose-built for property income, so landlords may find it overly generic.

QuickBooks

Best for: Sole traders who want a balance of features and price, or who sell products alongside services.

QuickBooks has strong MTD support and a well-designed interface. It handles bank feeds, invoicing, expenses, mileage tracking, and quarterly submissions. The Self-Employed plan starts at around £10/month, making it one of the more affordable paid options.

QuickBooks is particularly strong if you sell physical products — the inventory and purchase order features are more developed than most competitors at this price point. The tax estimates feature, which projects your tax liability based on current-year income, is genuinely useful for quarterly cashflow planning.

The downsides: the integration ecosystem is smaller than Xero's, which matters if you rely on niche tools. Bank feed connections can be less reliable than Xero or FreeAgent in the UK market specifically. And like Xero, landlord-specific features are limited.

Sage Accounting

Best for: Sole traders who want a free or very low-cost option and do not bank with NatWest group.

Sage offers a free tier for sole traders that includes basic bookkeeping, one bank feed connection, receipt capture, and MTD quarterly submissions. It is genuinely free — not a time-limited trial — and covers the MTD compliance basics.

The paid tier (around £12/month) adds quotes, invoicing, and cashflow forecasting. Sage has been in UK accounting for decades, so the tax categorisation and VAT handling are well-tuned for British tax rules.

The downsides: the free tier is limited to one bank account, which is a problem if your business income comes from multiple sources. The interface feels less polished than FreeAgent or Xero. And Sage's strength in the UK market is more on the practice/enterprise side — the sole trader product sometimes feels like an afterthought compared to their flagship offerings.

Hammock

Best for: Landlords with multiple properties.

Hammock is built specifically for property landlords and was one of the first HMRC-recognised providers for MTD for ITSA. Everything in the platform is designed around rental income: property-level profit and loss, mortgage interest tracking, tenant management, Section 24 tax relief calculations, and portfolio analysis.

If you own three or more rental properties, Hammock understands your world in a way that general accounting software does not. The quarterly submissions pull directly from your property records, and the reporting gives you a clear view of each property's financial performance.

The downsides: Hammock is not suitable if you have significant non-property self-employment income alongside your rental income. It is a specialist tool. If you are a sole trader who also has a buy-to-let, you would need Hammock plus a separate tool for the self-employment side, which adds complexity and cost. Pricing starts around £8/month per property, which adds up with a larger portfolio.

Briefcase Ledger

Best for: Sole traders and landlords who want their bookkeeping done for them, not just recorded.

Briefcase Ledger is a fundamentally different kind of MTD software. Where the tools above are digital ledgers that help you do your own bookkeeping, Briefcase Ledger uses AI agents to actually do the bookkeeping. It is built on the same engine that handles bookkeeping automation for hundreds of UK accounting firms — the same technology, now available directly to sole traders and landlords.

Upload a photo of a receipt, forward an invoice by email, or connect your bank feed, and the AI extracts the data, categorises the transaction, determines the correct VAT treatment, and prepares everything for your quarterly submission. It does not use simple keyword rules or bank feed matching — it understands the context of your business and learns from your ledger over time.

For landlords, Briefcase Ledger is particularly strong. A single licence covers unlimited rental properties and sole trade income — there is no per-property pricing like Hammock. Whether you have one buy-to-let or fifteen, plus freelance income on the side, it is all handled under one roof with one subscription.

Briefcase Ledger works for sole traders managing their own books, for landlords with any size portfolio, and for businesses whose accountant manages their MTD submissions. It is available direct — you do not need an accountant to use it, though many accountants are adopting it for their clients too.

The downsides: Briefcase Ledger launched in March 2026, so it is the newest entrant on this list. If you value a long track record over capability, the more established platforms have years of MTD for VAT experience. The AI-powered approach also means there is a short learning period as it adapts to your specific business — the first week or two require a bit more review before the system has built confidence in your patterns.

Choosing by your situation

If you are a sole trader with simple income

One income source, straightforward expenses, no employees. If you want free, FreeAgent (NatWest/RBS/Mettle customers) or Sage free tier will cover the basics. If you want the bookkeeping actually done for you rather than just recorded, Briefcase Ledger is the strongest option — the AI handles categorisation and VAT so you spend minutes per quarter, not hours.

If you are a sole trader with complex income

Multiple clients, project-based billing, business expenses across categories, possibly some product sales. This is where AI-powered tools shine. Briefcase Ledger handles the complexity automatically — new suppliers, mixed VAT rates, different expense categories — without requiring you to set up rules. Xero Standard or QuickBooks are solid alternatives if you prefer a traditional approach, especially if your accountant is already on one of those platforms.

If you are a landlord with one or two properties

Briefcase Ledger covers unlimited properties on a single licence alongside any sole trade income, making it the most cost-effective option for landlords who also freelance or run a side business. FreeAgent, QuickBooks, or Sage will also handle the basics. You do not need specialist landlord software for a small portfolio.

If you are a landlord with three or more properties

Briefcase Ledger handles unlimited properties on one licence with AI-powered categorisation across your entire portfolio — no per-property pricing. Hammock is an alternative if you specifically need property-level P&L reporting and mortgage tracking, but its per-property pricing adds up and it cannot handle self-employment income alongside rental income. If you have both, Briefcase Ledger covers everything in one place.

If your accountant manages your MTD submissions

Ask your accountant what platform they use. If they use Briefcase, you get the best of both worlds — AI-powered bookkeeping that processes your transactions automatically while your accountant handles the quarterly filings and year-end. Many practices are adopting Briefcase specifically because it reduces the manual bookkeeping burden on both sides.

The spreadsheet question

HMRC allows you to maintain records in a spreadsheet, but you cannot submit quarterly updates directly from Excel or Google Sheets. You need bridging software that connects to your spreadsheet and transmits the data via the MTD API.

Several providers offer bridging tools, and they are usually cheaper than full accounting software. But the experience is clunky: you maintain the spreadsheet, then run the bridging tool each quarter, check that it has read the data correctly, and submit. Any formula errors in your spreadsheet become submission errors.

For most sole traders, the cost of proper accounting software (often under £15/month, sometimes free) is worth the time saved over maintaining a spreadsheet plus bridging software. The exception might be if you have a highly customised spreadsheet that tracks something specific to your business that no accounting software handles — in that case, bridging software lets you keep your system while meeting the submission requirement.

What about free MTD software?

Genuinely free options exist, but with trade-offs:

• FreeAgent via NatWest/RBS/Mettle: Full product, no limitations. The best free option if you qualify.
• Sage free tier: Basic bookkeeping and MTD submissions. Limited to one bank account. No invoicing or quotes.
• HMRC's own tool: HMRC is developing a free digital record-keeping service, but it is designed for the simplest cases (very basic income and expenses) and may not be available for the April 2026 go-live. Check the GOV.UK software finder for the latest.

Free tools are perfectly viable for simple situations. But if you find yourself spending more than an hour per quarter wrestling with limitations, the £10–15/month for a paid tool pays for itself in time saved.

Frequently asked questions

Getting started

The first quarterly deadline is 5 August 2026. If you have not picked your software, do it this week. Most platforms offer free trials, so you can test the experience before committing. Connect your bank account, enter a few transactions, and see if the workflow feels manageable on a quarterly cadence.

For a broader view of MTD for ITSA requirements and deadlines, read our practical guide to MTD for ITSA compliance. To understand the penalties for late submissions and payments, see our guide to MTD penalties. And if you want to understand how AI is changing the bookkeeping behind MTD, read about AI bookkeeping vs OCR or how AI agents work in accounting.