Free MTD software for Income Tax: what genuinely exists (2026/27)
Yes, genuinely free MTD software exists. AbraTax offers a free tier, VitalTax makes your first submission free, and Easy MTD sells low-cost pay-per-submission credits. But free tiers cover the submission step only — you still need digital records that meet HMRC's rules.
Making Tax Digital for Income Tax has been mandatory since 6 April 2026 for UK sole traders and landlords with combined gross income over £50,000 — and HMRC contacted 864,000 people ahead of the first deadline. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, so a lot of people are asking the same question: what's the cheapest way to comply? This page sets out what's genuinely free, what free tiers leave out, and the lowest-cost stack that actually meets the rules.
What does MTD software actually have to do?
MTD for Income Tax has three requirements: keep digital records, send HMRC a quarterly update through recognised software, and file a year-end final declaration (which replaces the Self Assessment return). That's really two software jobs:
- Record-keeping. Your income and expenses, kept digitally, sorted into HMRC's categories. A spreadsheet is explicitly allowed.
- Submission. Sending HMRC your category totals each quarter. Updates contain totals per category, not individual transactions — which is why lightweight "bridging" software can do this job. Bridging software does one thing: it reads the totals from your spreadsheet and submits them to HMRC via API, with the field mapping done once and remembered.
When a product advertises "free MTD software", it almost always means the submission job. The record-keeping job is yours either way — and, as we'll see, that's where the real cost hides.
Which free and low-cost options genuinely exist?
As of mid-2026 (always check current pricing), the realistic budget options are:
- AbraTax — has a free tier. Spreadsheet-first with live tax estimates, and it accepts uploads including Google Sheets and CSV.
- VitalTax — an Excel add-in, so submission happens inside your spreadsheet. Your first submission is free, then it moves to a low-cost annual charge.
- Easy MTD — a standalone app selling pay-per-submission credits. The cheapest entry route if you just want to pay per quarter.
- 123 Sheets — not free, but an established spreadsheet-first provider from roughly £30–50 a year, with landlord-specific options.
- Full accounting software — the major cloud accounting platforms typically run £10–30 a month, i.e. £120–360 a year. You're paying for bank feeds, invoicing and automation, not just MTD compliance.
Free tiers change. Providers adjust pricing and free allowances regularly, and new products keep joining the market. Before committing, check HMRC's official list — search gov.uk for "Find software that works with Making Tax Digital for Income Tax" — and confirm the current terms on the provider's own site.
| Option | Cost (as of mid-2026 — check current) | What it does | Worth knowing |
|---|---|---|---|
| AbraTax | Free tier available | Spreadsheet-first bridging with live tax estimates | Accepts Google Sheets and CSV uploads |
| VitalTax | First submission free, then low-cost annual | Excel add-in; submit from inside the spreadsheet | Excel-based workflow |
| Easy MTD | Pay-per-submission credits | Standalone submission app | Cheapest entry route; pay as you go |
| 123 Sheets | From roughly £30–50/yr | Spreadsheet-first bridging | Established provider; landlord-specific options |
| Full accounting software | £10–30/month (£120–360/yr) | Records + submission + extras in one subscription | Most capability, highest ongoing cost |
What do free tiers leave out?
A free bridging tier gets your totals to HMRC. It generally does not help you with:
- Categorisation. Sole trader expenses need to match the SA103 categories (materials, subcontractors, vehicle and travel, premises, admin, professional fees and so on). Landlords have their own wrinkles: residential finance costs like mortgage interest aren't deducted as an expense at all — they get a 20% basic-rate tax credit and their own category in the quarterly update. Get the categories wrong and every submission is wrong.
- Cumulative figures. Each quarterly update covers the tax year so far, not just the quarter. Your spreadsheet needs to produce cumulative totals cleanly (the upside: an error in a previous quarter is automatically corrected in your next update — no resubmission needed).
- Digital links. Spreadsheets are allowed, but totals must flow into the submission by formula or software link. Retyping or copy-pasting totals breaks the rules. A free tier won't rescue a spreadsheet built around manual copying.
- Separate income streams. If you have both property and self-employment income, each needs its own quarterly updates — two sets of records, two submissions.
So the hidden cost of "free" isn't the software. It's the quality of your record-keeping. A muddled spreadsheet costs you hours each quarter, or an accountant's bill that dwarfs any software subscription. The submission is the quick part; the record-keeping behind it is where the real work lives.
Don't want to build the spreadsheet yourself? The MTD Quarterly Kit is a £19 one-off workbook (Excel and Google Sheets) with HMRC's exact quarterly-update categories, an automatic cumulative Quarterly Update sheet that's digital-links compliant and bridging-software-ready, plus a "Submit in 20 Minutes" guide. There's a Sole Trader Edition and a Landlord Edition, each with free updates for 2026/27.
What's the cheapest fully compliant stack?
Honest answer: the genuinely £0 route exists. Build your own spreadsheet with HMRC's categories and formula-linked cumulative totals, connect it to a free bridging tier such as AbraTax's, and you've spent nothing but time. If your turnover is under £90,000 you may also qualify for simplified "3-line accounts" reporting (income total, expenses total, profit), which makes the spreadsheet simpler still.
If you'd rather not gamble your compliance on a homemade template, the cheapest ready-made stack looks like this:
- Records: a pre-built workbook with HMRC's categories and automatic cumulative totals — £19 one-off.
- Submission: a free bridging tier (or first-submission-free, on pay-per-submission credits (check current pricing)). Confirm current terms on HMRC's list first.
- Deadlines: a calendar. Quarterly deadlines for 2026/27 run to 7 November 2026 (Q2, period to 5 October), 7 February 2027 (Q3) and 7 May 2027 (Q4), with the final declaration due 31 January 2028. The free MTD Deadline Pack is a calendar file with two-week warnings plus a one-page cheatsheet — free because missing a deadline shouldn't cost anyone a penalty point.
Total for year one: under £20 — against £120–360 a year for a full accounting subscription. To be fair to the subscriptions: if you want bank feeds, invoicing and receipt capture, they earn their keep. If you just want to keep good records and comply, you don't need them. And the penalties for getting this wrong are real but modest at first: each late quarterly submission earns a penalty point, a £200 fine applies at four points, and points expire after 24 months — reason to get organised, not to panic-buy software.
Frequently asked questions
Can I keep my records in a free spreadsheet like Google Sheets?
Yes. Spreadsheets are explicitly allowed as digital records, provided they connect to HMRC through recognised bridging software using digital links — the totals must flow by formula or software link. Retyping or copy-pasting totals into a submission breaks the rules. Some bridging tools, including AbraTax, accept Google Sheets and CSV uploads directly.
Will the free tiers stay free?
No guarantees. The prices and free allowances here are as of mid-2026, and providers change them. Before relying on any free tier, check the provider's current terms and confirm the product still appears on HMRC's official list (search gov.uk for "Find software that works with Making Tax Digital for Income Tax").
Do quarterly updates mean paying tax four times a year?
No. Quarterly updates are reporting only — cumulative totals per HMRC category for the tax year so far. Your tax is still paid by 31 January (plus payments on account where applicable). For 2026/27, the final declaration and tax payment are due by 31 January 2028.
What happens if I miss a submission while I'm still choosing software?
Each late quarterly submission earns a penalty point, and at four points a £200 fine applies. Points expire after 24 months. One late quarter won't fine you, but the points build — so it's worth signing up (gov.uk, "Sign up for Making Tax Digital for Income Tax", using your Self Assessment Government Gateway ID) and picking a route before the next deadline rather than after it.
The short version: free bridging software genuinely exists — AbraTax's free tier, VitalTax's free first submission, Easy MTD's credits — and paired with a properly structured spreadsheet it's all most sole traders and landlords need. If you want that spreadsheet done for you, the MTD Quarterly Kit is £19 one-off: Sole Trader Edition, Landlord Edition, or the Complete Bundle (both editions) for £29.
This page is general information, not tax advice, and buying our products doesn't create an accountant–client relationship. Check gov.uk or a qualified accountant for your own circumstances. We are not affiliated with HMRC. Published by Cunniffe & Helm Ltd (England & Wales no. 08990516) trading as MTD Quarterly Kit. Full terms: mtdquarterlykit.co.uk/legal.