How much does MTD software cost?

Q: Can I claim MTD software as an expense?

Often, yes, if it's used for the business. Sole traders: GOV.UK lists "computer software your business uses for less than 2 years" and software where "your business makes regular payments to renew the licence" as allowable expenses. Other software is claimed as capital allowances, unless you use the cash basis (GOV.UK). A monthly or yearly MTD subscription is a regular licence payment. Landlords: you can deduct expenses that are "wholly and exclusively for the purposes of renting out the property", and capital expenses aren't allowable (GOV.UK; HMRC Property Income Manual PIM2005). GOV.UK's landlord list doesn't name software, but it does include accountant's fees and direct costs such as stationery. If you use the software partly for something else, only the business part counts. If you claim the £1,000 property allowance instead of your actual expenses, you can't also deduct the software cost (GOV.UK). Check with an accountant if you're not sure.

Written by the Quidtrail team · Facts last checked 18 October 2026

The short answer: anywhere from £0 to tens of pounds a month. Some providers say filing is free (mostly spreadsheet bridging tools and limited free plans). Others charge an annual licence (for example £30 + VAT a year) or a monthly subscription, often with a discounted first few months. HMRC doesn't provide software. It says free products exist for simple tax affairs but may have limits (GOV.UK).

General information, not tax or financial advice. Prices are as shown on providers' websites on 18 October 2026, may exclude VAT, and change often. Check before you buy.

What drives the cost

Type of product. Bridging software (it links your spreadsheet to HMRC) tends to cost less than full record-keeping or accounting software, which may include bank feeds and receipt capture.
Number of income sources. HMRC needs a separate quarterly update for each self-employment and property business (GOV.UK). Some products charge for each extra source.
Portfolio size. Landlord products often price by properties or tenancies.
Introductory offers. Many prices are discounted for the first months, then rise.
VAT. Most business prices are shown excluding VAT.
Year-end filing. If a product doesn't file the tax return, you may need (and pay for) a second product.

The government has said it will keep working with developers so there's "a choice of free and low-cost products" (GOV.UK impact note).

Prices stated by providers (checked 18 October 2026)

In alphabetical order. This isn't a ranking or a recommendation, and we haven't tested these products. Each provider states its product works with MTD for Income Tax. When we checked on 18 October 2026, every product in this table was also listed on HMRC's software finder, although the finder showed aligned.tax for quarterly updates only and Sage's product as "Sage Sole Trader & Landlord". HMRC says all listed software has passed its recognition process, but it doesn't recommend any product. Check the finder again on the day you choose.

Product	Type	Price stated (VAT as shown)	Notes from the provider's page	Source
aligned.tax	Bridging	£0 for individuals filing their own quarterly updates	Year-end filing "coming soon". Accountants: per-client pricing from 2027 to 2028	aligned.tax
flonancial	Bridging	£0	Says quarterly updates and the year-end return stay free. Aimed at income under £90,000	flonancial.co.uk
Hammock	Landlord software	From £8 + VAT a month (1 to 3 properties), £15 (4 to 10), £25 (11 to 20). 20% off if billed annually	30-day free trial. Lists MTD quarterly updates and final declaration	usehammock.com
Landlord Vision Visit Landlord Vision	Landlord software	See the current price on the provider's site (checked 18 October 2026). The page shows several figures per plan, including discounts and a promotion, and says prices exclude VAT	Says every plan includes full MTD functionality at no extra cost. Plans are priced by number of tenancies. 2-week free trial	landlordvision.co.uk
My Tax Digital	Bridging or record-keeping	£0	Free MTD for Income Tax and VAT	mytaxdigital.co.uk
QuickBooks (UK) Visit QuickBooks	Accounting software	See the current price on the provider's site (checked 18 October 2026). Prices didn't display on the pricing page	"Free for 30 days" on each plan. Sole Trader Plus and other plans list "MTD for Income Tax ready"	quickbooks.intuit.com
Sage Sole Trader Visit Sage	Record-keeping app	Free plan £0. Paid plan £7 a month + VAT	Free plan limits: 25 auto-categorised transactions, 1 bank account, 5 invoices a month. A second income source needs a paid business	sage.com
VitalTax	Bridging (Excel add-in)	First quarterly submission free, then £30 + VAT a year for 1 person (£54 for 2, £72 for 3)	Covers all income sources for that person	vitaltax.co.uk
Xero (UK) Visit Xero	Accounting software	Ignite £18, Grow £39, Comprehensive £55, Ultimate £70 a month + VAT	90% off for the first 6 months for new UK customers. Auto-renews monthly. All plans list "MTD for Income Tax ready"	xero.com

Working out your yearly cost

To compare like for like, work out the 12-month cost for your situation:

List your income sources (each trade, UK property, foreign property).
Check whether the product files quarterly updates and the tax return. If not, add the cost of a second product.
Add any per-property, per-tenancy or per-source charges.
Use the full price after the introductory period, and add VAT if it's shown without it.
Check for paid add-ons you'd need, such as bank feeds, receipt capture or agent access.

Example (illustrative, using the prices above): a landlord with 3 properties paying Hammock's monthly Basic price would pay £8 × 12 = £96 + VAT a year. Annual billing at 20% off brings that to £76.80 + VAT. A spreadsheet user on VitalTax for one person would pay £30 + VAT a year after the free first submission. These aren't recommendations, just how the arithmetic works.

Is there an accountant cost too?

Using an accountant is optional. Software alone meets the MTD requirements if you do it yourself. We haven't found an official source for typical accountant fees, so we don't quote any.

Prices last checked on providers' websites on 18 October 2026. Not tax or financial advice.

Frequently asked questions

What's the cheapest MTD software?

Several providers say you can file for £0, but free products may not cover every income source or the tax return. Work out the full-year cost for your situation using the steps above.

How much is MTD software for landlords?

In our 18 October 2026 table, Hammock showed £8 + VAT a month for 1 to 3 properties. Landlord Vision's page showed several figures per plan, so check its current price on its site. Several free and bridging options also support UK property. Prices rise with portfolio size.

Do I pay VAT on MTD software?

Most providers show business prices excluding VAT, so check the checkout total.

Can I claim MTD software as an expense?

Often, yes, if it's used for the business.

Sole traders: GOV.UK lists "computer software your business uses for less than 2 years" and software where "your business makes regular payments to renew the licence" as allowable expenses. Other software is claimed as capital allowances, unless you use the cash basis (GOV.UK). A monthly or yearly MTD subscription is a regular licence payment.
Landlords: you can deduct expenses that are "wholly and exclusively for the purposes of renting out the property", and capital expenses aren't allowable (GOV.UK; HMRC Property Income Manual PIM2005). GOV.UK's landlord list doesn't name software, but it does include accountant's fees and direct costs such as stationery. If you use the software partly for something else, only the business part counts.
If you claim the £1,000 property allowance instead of your actual expenses, you can't also deduct the software cost (GOV.UK).

Check with an accountant if you're not sure.

Sources

Facts last checked: 18 October 2026.