Is Free MTD Software Genuinely Free?
Some products are genuinely free at the point of use; others offer a free tier with paid upgrades. Read the terms before relying on a product, and always confirm the product appears on HMRC’s current list of MTD-compatible software.
What Free MTD Software Typically Covers
Free tiers usually cover the essentials: digital record-keeping for a single income source, and the ability to send your four quarterly updatesand final declaration to HMRC. That is often enough for a straightforward sole trader or a landlord with one or two properties who is happy to type in their own figures. What you generally do not get for free is the time-saving automation — bank feeds, receipt capture, rules and detailed reporting.
Free software vs a spreadsheet plus bridging tool
There are really two “low-cost” routes. A free app gives you a simple all-in-one tool. Alternatively, if you already keep a spreadsheet, low-cost or occasionally free bridging software can submit from it — provided there is a digital link so figures are not retyped. Bridging suits people who are comfortable in Excel; a free app suits those who would rather have a guided interface.
Limitations of Free MTD Tools
Common limitations: no bank feeds, single income source only, restricted support, no mobile app and limited reporting. They can be a workable starting point for very simple businesses.
When to Consider Paid MTD Software
Once you have multiple income sources, employees, more than a handful of monthly transactions, or want bank feeds and automation, paid software typically pays for itself in time saved and error reduction.
HMRC's Software Recognition Criteria
HMRC publishes technical and functional standards software must meet to be listed. Always check that any free product is currently on the recognised list.
Watch for the ‘free but…’ catches
“Free” can mean different things, so read the terms. Some products are free only on a trial, or free for one tax year, or free provided you bank with a particular provider. Others are genuinely free at the point of use but cap the number of transactions or income sources. None of that is a problem — just make sure the free tier still covers everything you need to keep digital records and file to HMRC, and that the product is on HMRC’s recognised list, before you commit your year to it.
Getting Help to Set Up Free MTD Software
Our software setup service can configure free MTD software for you, migrate existing records and confirm HMRC authorisation — so even a no-cost tool is set up correctly from day one.