The true cost of MTD for Income Tax software: the data
We track what every HMRC-recognised Making Tax Digital for Income Tax tool actuallycosts per year — the cheapest plan that covers a typical sole trader or landlord, annualised and with VAT included, rather than the “from £X/month” headline. It's the only dataset we know of that does this across the whole market, and it's free to cite.
Catalogue reconciled 24 June 2026. Figures recompute from the live data, so they stay current. Method: how we calculate this.
Key findings
The same legal obligation costs anywhere from £0 to £216 a year depending only on which tool you pick. 4 are reachable at £0 — 2 via a free tier (Landlord Studio, Zoho Books), 1 free with a qualifying bank account (FreeAgent), and 1 free for the first year (AffordableMTD).
The “from £X/month” trap
Headline prices are quoted monthly and ex-VAT. Annualise them and add the VAT most sole traders and landlords can't reclaim, and the real cost is higher than it looks:
| Tool | Headline | Reads as | True £/yr (incl VAT) |
|---|---|---|---|
| Sage Accounting | £15/mo | £180/yr | £216/yr |
| FreshBooks | £15/mo | £180/yr | £216/yr |
| Landlord Studio | £12/mo | £144/yr | £172.80/yr |
| QuickBooks | £10/mo | £120/yr | £144/yr |
| FreeAgent | £10/mo | £120/yr | £144/yr |
| Zoho Books | £10/mo | £120/yr | £144/yr |
| Hammock | £8/mo | £96/yr | £115.20/yr |
| Xero | £7/mo | £84/yr | £100.80/yr |
| Coconut | £5.5/mo | £66/yr | £79.20/yr |
Full ranking, cheapest first
| # | Tool | Type | True £/yr (incl VAT) |
|---|---|---|---|
| 1 | Landlord Studio | Landlord specialist | Free |
| 2 | Zoho Books | Cloud accounting | Free |
| 3 | AffordableMTD | Bridging | £19.99/yr |
| 4 | 123 Sheets | Bridging | £23.70/yr |
| 5 | VitalTax | Bridging | £36/yr |
| 6 | GoSimpleTax | Tax filer | £69.99/yr |
| 7 | Coconut | Cloud accounting | £79.20/yr |
| 8 | Xero | Cloud accounting | £100.80/yr |
| 9 | Hammock | Landlord specialist | £115.20/yr |
| 10 | TaxCalc | Tax filer | £134.40/yr |
| 11 | QuickBooks | Cloud accounting | £144/yr |
| 12 | FreeAgent | Cloud accounting | £144/yr |
| 13 | APARI | Tax filer | £144/yr |
| 14 | Sage Accounting | Cloud accounting | £216/yr |
| 15 | FreshBooks | Cloud accounting | £216/yr |
Cite this data
Journalists and writers are welcome to use these figures with a link back. Please cite as:
MTD Software Finder, “The true cost of MTD for Income Tax software”, www.whichmtdsoftware.co.uk/data (updated 24 June 2026).
Want the full per-tool breakdown, a specific cut (landlords, the self-employed, free options), or a quote? The site is built and maintained by Dominic Roe, a Data Engineer & Business Intelligence Developer — email dom@whichmtdsoftware.co.uk.
Explore the data
Independent and not affiliated with HMRC. Figures are kept current but can change at any time; always confirm on the vendor's own site. Not tax advice.