Best MTD-Compatible Software for UK Tradespeople 2026

From April 2026, sole traders earning over £50,000 must use HMRC-compatible software to meet their Making Tax Digital obligations. If you're below that threshold, you've got a year or two before it becomes mandatory — but choosing the right software now means you're sorted when the deadline arrives rather than scrambling at the last minute.

The problem is most accounting software comparison guides are written for office-based businesses. This one isn't. It's written specifically for tradespeople — plumbers, electricians, builders, joiners, and everyone else who needs software that handles CIS, works on a phone while you're on site, and doesn't require an accounting degree to use.

Here's what's worth your money in 2026.

What to Look For as a Tradesperson

Before comparing tools, here's the filter to apply. Good MTD software for a tradesperson needs to:

• Be HMRC-recognised for MTD Income Tax — not just VAT. Check the GOV.UK software list before committing.
• Handle CIS — if you pay subcontractors or receive payments as a subcontractor, CIS tracking is essential. Not all accounting software handles this.
• Work properly on mobile — you're not sat at a desk. Receipt capture, invoicing, and mileage tracking all need to work from your phone.
• Connect to your bank account — automatic bank feeds pull transactions in without manual entry. This is what makes quarterly updates manageable.
• Be used by your accountant — if your accountant already uses a particular platform, use the same one. It saves hours of back and forth at year end.

The Best MTD-Compatible Accounting Software for UK Tradespeople

1. Xero — Best Overall for Growing Trade Businesses

Xero is the most widely used accounting platform among UK accountants and for good reason — it's powerful, reliable, and handles the complexity that trade businesses run into as they grow. Bank feeds are excellent, the interface is clean, and the app marketplace means it integrates with practically everything including Tradify for job management.

For tradespeople specifically, Xero handles CIS contractor and subcontractor tracking, VAT returns, payroll via Xero Payroll, and MTD quarterly updates all within one platform. If your business is growing and you're dealing with employees, subcontractors, and VAT alongside income tax, Xero keeps it all in one place.

Pricing: From £16/month (Ignite plan) for sole traders needing MTD compliance. Most tradespeople will be fine on this plan.

CIS support: Yes — handles subcontractor verification, deductions, and monthly CIS returns.

Mobile app: Strong. Receipt capture, invoice creation, and bank reconciliation all work well on the go.

Best for: Tradespeople with employees or subcontractors, those already using Xero Payroll, or anyone whose accountant recommends it. Best long-term fit if you're planning to grow.

Worth knowing: Xero restructured its plans in 2024 — the old Starter/Standard/Premium tiers are gone. New customers are on the Ignite/Grow/Comprehensive range. Make sure you're comparing current pricing.

2. FreeAgent — Best for Sole Traders Who Want Simple

FreeAgent was built in Edinburgh specifically for freelancers, contractors, and sole traders — and it shows. The UK tax focus means Self Assessment, MTD quarterly updates, and VAT returns all work cleanly without much setup. It's the platform most likely to just work without you needing to configure anything.

The standout for tradespeople is the mobile receipt capture and mileage tracking — both genuinely useful when you're driving between jobs and spending on materials throughout the day. The interface is less complex than Xero, which suits tradespeople who want to spend as little time as possible on the admin side.

Pricing: Free for NatWest, RBS, Ulster Bank, and Mettle business account holders. From £14.50/month otherwise. This is worth checking before paying — if you bank with NatWest or RBS you can get fully functional MTD-compatible software at zero cost.

CIS support: Limited compared to Xero — FreeAgent handles subcontractor payments but doesn't file CIS returns directly. If CIS is a significant part of your business, Xero or Sage is a better fit.

Mobile app: Excellent. Receipt capture and mileage logging are the best in class for sole traders.

Best for: Sole trader tradespeople with straightforward income, no employees, and limited CIS involvement. Especially strong value if you bank with NatWest or RBS and can get it free.

3. QuickBooks — Best Budget Option for Straightforward Sole Trades

QuickBooks offers the cheapest entry point of any major MTD-compatible platform at £10/month for the sole trader plan. If your business is straightforward — one income stream, no employees, limited subcontractor work — it covers the MTD bases at the lowest monthly cost.

The mobile app is particularly good for receipt capture on the go, and the interface is clean enough that you don't need accounting knowledge to use it day to day. It's less powerful than Xero for complex situations but handles the basics well.

Pricing: £10/month (Sole Trader plan). Note: if you become VAT registered or need employees/CIS, you'll need to upgrade to Simple Start at £16/month or above.

CIS support: Available via QuickBooks Advanced Payroll module — not included on the base Sole Trader plan. Worth checking before committing if CIS is relevant to your work.

Mobile app: Very good. Best receipt capture feature of the main platforms.

Best for: Sole trader tradespeople with simple finances who want the lowest monthly cost from a major MTD platform.

4. Sage Accounting — Best for Tradespeople Already in the Sage Ecosystem

If you're already using Sage Payroll for your employees, Sage Accounting is the natural companion — everything integrates without manual journal entries and your accountant has full visibility across payroll and accounts in one place. It's an established UK brand with strong HMRC compliance and good support.

Pricing: From £12/month for the entry plan. Discounts regularly available.

CIS support: Yes — handles CIS deductions and returns. Strong CIS functionality is one of Sage's traditional strengths in the construction sector.

Mobile app: Functional but less polished than FreeAgent or QuickBooks on mobile.

Best for: Trade businesses already using Sage Payroll, or those who prefer a traditional UK brand with phone support and a long track record.

What About Spreadsheets?

You can still use spreadsheets under MTD — but only if you connect them to HMRC via bridging software. Tools like VitalTax or MyTaxDigital act as the link between your spreadsheet and HMRC's systems, allowing quarterly updates to be submitted without switching to full accounting software.

It works, but it adds a step and requires your spreadsheet to be structured correctly every quarter. For most tradespeople, proper accounting software is a cleaner solution — especially once bank feeds are pulling transactions in automatically and there's very little manual input required.

Quick Verdict: Which One Should You Choose?

• Bank with NatWest, RBS or Mettle → FreeAgent free — don't pay for software you can get at no cost
• Sole trader, simple finances, lowest cost → QuickBooks Sole Trader (£10/month)
• Sole trader wanting clean UK-focused software → FreeAgent (£14.50/month)
• Growing trade business with employees or subcontractors → Xero (£16/month)
• Already using Sage Payroll → Sage Accounting
• Your accountant uses a specific platform → Use the same one, always

How Tradify Fits In

Tradify handles your quoting, job management, and invoicing — and integrates directly with Xero and other accounting platforms. That means every invoice you raise in Tradify flows into your accounting software automatically, feeding your MTD records without any double entry.

For a tradesperson getting set up for MTD, pairing Tradify with Xero or FreeAgent gives you the complete picture — job management and tax compliance working together from day one.

Try Tradify Free — Integrates With Xero and Leading Accounting Software

Use code PARTNER for 50% off your first 3 months.

The Bottom Line

For most sole trader tradespeople, the choice comes down to three options: FreeAgent if you bank with NatWest or RBS and can get it free, QuickBooks if you want the cheapest paid option for simple finances, or Xero if you're growing and need CIS, payroll, and accounting in one place.

All three are HMRC-recognised for MTD Income Tax. All three work on mobile. The difference is in complexity, CIS capability, and cost — and the right answer depends on where your business is right now and where it's heading.

If you haven't sorted your MTD software yet, our step-by-step guide on how to prepare for Making Tax Digital as a sole trader walks you through getting set up. And if you're not sure whether MTD applies to you yet, start with our plain English guide to what Making Tax Digital means for UK tradespeople.

Affiliate disclosure: Some links on this page are affiliate links. If you sign up through them we may earn a commission at no extra cost to you. We only recommend tools we'd genuinely point a tradesperson towards.