Best Free MTD Software UK: Real Options in 2026

Making Tax Digital does not have to cost you a penny in software fees. Several genuinely free MTD-compliant options exist in the UK, though they come with different trade-offs. Some are full accounting packages bundled free with business banking. Others are bare-bones bridging tools that let you submit from Excel. And some advertise as ‘free’ but charge you the moment you try to do anything useful.

This guide separates the genuinely free from the misleadingly free. Written by ICAEW chartered accountants who have tested every option listed below with real UK client data. No affiliate links. No sponsored placements. Just honest assessment of what works at zero cost.

For the paid software landscape (Xero, QuickBooks, Sage), see our complete MTD app comparison or the specific head-to-head guides for Xero vs QuickBooks and Sage vs Xero.

The Quick Answer: Best Free MTD Software in 2026

Our top pick: FreeAgent via NatWest, RBS, Ulster Bank, or Mettle business banking is the clear winner. You get a full, professional accounting package with MTD VAT compliance, MTD ITSA readiness, bank feeds, receipt capture, invoicing, and reporting at genuinely zero ongoing cost. Nothing else comes close to this value.

1. FreeAgent Free (via NatWest, RBS, Ulster Bank, or Mettle)

How It Works

NatWest Group (which includes NatWest, RBS, Ulster Bank, and their digital bank Mettle) includes a full FreeAgent subscription at no additional cost with any business current account. This is not a limited trial or a stripped-down version. It is the complete FreeAgent product, identical to what direct subscribers pay £15 per month for.

What You Get for Free

• Full MTD VAT compliance (prepare, review, submit returns to HMRC)
• MTD ITSA quarterly submission capability (from April 2026)
• Automatic bank feed from your NatWest/RBS/Mettle account
• Unlimited invoicing with customisable templates
• Expense tracking with mobile receipt capture
• Self Assessment tax estimation
• Corporation Tax estimation (for small Ltds)
• CIS support for construction subcontractors
• Basic payroll (1 to 2 employees)
• Year-end accounts preparation
• Accountant access (your accountant can log in to review your data)

The Catch

You must hold a business current account with NatWest, RBS, Ulster Bank, or Mettle. If you close the bank account, you lose the free FreeAgent subscription (though you can then pay £15 per month to keep FreeAgent separately). The bank accounts themselves range from free (Mettle, basic NatWest Start-up) to modest monthly fees depending on the account type.

Who This Suits

• Sole traders and freelancers (the interface is designed for you)
• Small Ltd companies with 1 to 3 directors

CIS subcontractors needing MTD VAT plus CIS tracking

• Anyone wanting genuine full-featured accounting at zero ongoing software cost

Who This Does Not Suit

• Businesses needing multi-user access (FreeAgent is single-user only)
• Businesses with significant inventory or stock management needs
• Businesses with complex multi-currency requirements
• Growing companies with 10+ employees (payroll becomes limited)

Switching bank to save money: If you currently bank with Barclays, HSBC, Lloyds, or another provider and pay £15+ per month for accounting software, switching to a NatWest or Mettle business account to get FreeAgent free saves £180+ per year in software costs. The switch takes about 7 working days via the Current Account Switch Service.

2. ANNA Business Account (Free Banking + Free MTD Bridging)

How It Works

ANNA is a UK digital business bank that includes free MTD VAT bridging software as part of its business account. You maintain your records in Excel or Google Sheets, and ANNA’s built-in tool submits your VAT return to HMRC via the MTD API. The business account itself is free for basic use.

What You Get for Free

• Free UK business current account (basic tier)
• Free MTD VAT bridging (submit from spreadsheets)
• Automatic expense categorisation from bank transactions
• Receipt capture via mobile app
• Basic invoicing

The Catch

ANNA is a bridging solution, not full accounting software. You are responsible for maintaining your own spreadsheet records, calculating VAT figures, and ensuring your data is correct before submission. The tool transmits what you give it. It does not check it.

You also need to maintain proper digital links within your spreadsheet. Data must enter your spreadsheet via digital means (bank statement import, CSV), not by re-typing from paper receipts.

Who This Suits

• Businesses genuinely committed to Excel who want zero software cost
• Very simple businesses with straightforward VAT (few transaction types)
• Businesses that want to keep their existing spreadsheet-based workflow

Who This Does Not Suit

• Anyone who wants their VAT calculated automatically (use FreeAgent instead)
• Businesses with any complexity (mixed VAT rates, partial exemption, imports)
• Anyone preparing for MTD ITSA (bridging for ITSA is still limited)

Honest assessment: ANNA’s free bridging works, but it is the most manual option on this list. Businesses using ANNA bridging typically spend 5 to 10 times more time on VAT admin than those using FreeAgent. The ‘free’ software costs you time instead of money. For most businesses, FreeAgent free via NatWest is a dramatically better deal.

3. Other Free or Very Low Cost Bridging Software

Several standalone bridging tools offer free or nearly-free MTD VAT submission from spreadsheets:

All bridging software requires you to maintain your own records and calculate your own figures. The software only handles the transmission to HMRC. For businesses considering this route, read our MTD record keeping guide carefully. Digital links rules apply to bridging software just as strictly as to full accounting packages.

4. Wave Accounting (Free Cloud Accounting, Limited MTD)

How It Works

Wave is a genuinely free cloud accounting platform (funded by payment processing fees). It offers invoicing, expense tracking, bank connections, and basic reporting at zero cost. However, Wave does not have native MTD VAT submission capability for the UK market. You would need to pair Wave with separate bridging software to submit VAT returns to HMRC.

What You Get for Free

• Unlimited invoicing
• Expense tracking and receipt scanning
• Bank connections (limited UK bank support)
• Basic financial reporting
• Multi-currency (basic)

The Catch

No native MTD VAT or MTD ITSA submission. UK bank feed support is less reliable than FreeAgent, Xero, or QuickBooks. The platform is primarily designed for North American businesses and UK-specific features feel bolted on rather than native. You would need separate bridging software (additional cost) to actually submit to HMRC.

Our Verdict

Wave is a good free accounting tool for internal bookkeeping, but it is not a practical standalone MTD solution for UK businesses. The need for additional bridging software negates much of the ‘free’ advantage. FreeAgent via NatWest is a better option for UK businesses in almost every scenario.

5. GoSimpleTax (Nearly Free, MTD ITSA Focused)

How It Works

GoSimpleTax is not technically free (from £40 per year, roughly £3.33 per month), but it is close enough to free that it deserves inclusion. It focuses specifically on Self Assessment and MTD ITSA rather than trying to be a full accounting package.

What You Get

• MTD ITSA quarterly submission capability
• Self Assessment preparation and filing
• Tax calculation and estimation
• Simple income and expense tracking
• Property income section for landlords

Who This Suits

Simple sole traders and small landlords who need MTD ITSA compliance at the lowest possible cost and do not need invoicing, bank feeds, or other full accounting features.

Limitations

• No MTD VAT submission (separate software needed if VAT-registered)
• No bank feeds or automatic transaction import
• No invoicing capability
• No receipt capture
• Manual data entry only

6. Free Trials of Paid Software (30 Days, Then Decide)

Every major MTD platform offers a free trial period. This is not a permanent free option, but it is a valuable zero-cost way to test software before paying:

Our recommendation: even if you plan to use FreeAgent free via NatWest, trial Xero and QuickBooks as well. It takes 30 minutes to enter a month of transactions into each platform. The software you find most natural is the one you will actually use consistently. See our full software comparison for detailed feature analysis.

What ‘Free’ MTD Software Actually Costs You

Nothing in business is truly free. Even the best free options have hidden costs:

Time Cost

Bridging software (ANNA, VitalTax, etc.) saves money but costs time. Where FreeAgent with bank feeds takes 15 minutes per VAT quarter, bridging from Excel typically takes 2 to 4 hours. Over a year, that is 6 to 14 extra hours. Value your time accordingly.

Error Cost

Manual spreadsheet work creates more errors than automated software. Each error risks incorrect VAT returns, missed reclaims, or HMRC queries. A single missed VAT reclaim of £200 costs more than a year of most paid software subscriptions.

Opportunity Cost

Proper accounting software gives you real-time business visibility (profit, cash flow, tax position). Spreadsheets give you backward-looking snapshots. The management information gap can cost far more than software fees in missed business decisions. This is why chartered accountants almost universally recommend proper software even when free bridging options exist.

Scalability Cost

Free tools that work at £30,000 turnover often break at £80,000. Migrating mid-growth creates disruption exactly when you can least afford it. Starting on a platform that scales (even if it costs £15 per month) avoids the migration cost later.

The real calculation: FreeAgent via NatWest costs £0 per month AND gives you bank feeds, receipt capture, invoicing, MTD compliance, and real-time reporting. Bridging software costs £0 to £40 per year but gives you only the submission capability. The time and error cost of bridging usually exceeds the £180 per year that FreeAgent costs if you were paying for it directly.

Case Study: From £35 Per Month Software to £0 (Without Losing Anything)

A freelance copywriter based in the Bristol area came to us in early 2026 paying £35 per month for QuickBooks Simple Start to handle her MTD VAT compliance. Turnover of approximately £48,000, VAT-registered on Flat Rate Scheme, simple sole trader with minimal expenses. She was paying £420 per year for software that she used for about 2 hours per quarter.

Her situation:

• £48,000 turnover, sole trader, Flat Rate Scheme
• QuickBooks Simple Start at £35 per month (£420 per year)
• Used QuickBooks for MTD VAT submission and basic invoicing
• Banked with Santander business account (no free software included)
• Spending 2 hours per quarter on QuickBooks (8 hours per year total)

What we did:

1. Assessed her actual software needs: invoicing, MTD VAT, expense tracking, receipt capture
2. Confirmed FreeAgent would handle everything she needed
3. Helped her open a Mettle business account (free, took 15 minutes online)
4. Activated FreeAgent free via Mettle
5. Migrated her QuickBooks data (contacts, invoices, expense categories) to FreeAgent
6. Connected Mettle bank feed to FreeAgent
7. Cancelled QuickBooks subscription after confirming FreeAgent was working
8. Kept her Santander account as secondary (she preferred not to close it immediately)

Outcome: Software cost dropped from £420 per year to £0. She actually found FreeAgent easier to use than QuickBooks for her simple needs (fewer menu options, cleaner interface for sole traders). MTD VAT submissions continued seamlessly. Quarterly filing time dropped from 2 hours to approximately 45 minutes because FreeAgent’s bank feed categorised most transactions automatically. Our one-off migration fee: £150. Payback period: less than 5 months from software savings alone.

Free MTD Software: Complete Comparison

Warning: ‘Free’ MTD Software That Is Not Actually Free

Several providers advertise ‘free MTD software’ but have significant hidden costs or limitations:

Free Trials Marketed as Free Software

Some providers promote their 30-day trial as ‘free MTD software’ in search results. After 30 days, you must pay or lose access to your data. This is a free trial, not free software. Legitimate, but misleading if you were expecting ongoing free access.

Free Filing With Paid Record-Keeping

Some tools offer free MTD submission but charge for the record-keeping features you need to actually prepare the return. The submission itself costs £0 but the bookkeeping costs £10 to £20 per month. Read the pricing page carefully before committing.

Free for First Year, Then Full Price

Introductory offers of 12 months free are genuine value but not the same as permanently free software. Budget for the full price from year two. If the full price exceeds your budget, plan your migration to a genuinely free option before the paid period begins.

Free Software With Mandatory Paid Support

A small number of providers offer free software but require paid ‘onboarding’ or ‘support packages’ to actually set it up. If the software requires paid support to function, it is not genuinely free. Professional accounting software should be usable without mandatory paid hand-holding.

Free MTD Software: FAQs

What is the best completely free MTD software?

FreeAgent via NatWest, RBS, Ulster Bank, or Mettle business banking. Full accounting software, MTD VAT, MTD ITSA ready, bank feeds, invoicing, receipt capture, all at zero ongoing cost. Nothing else matches this value.

Is there genuinely free MTD VAT software?

Yes. FreeAgent via NatWest/RBS/Mettle is the best full-featured option. ANNA offers free bridging from spreadsheets. BTCSoftware offers limited free submissions. All are genuinely free with no hidden charges for basic MTD VAT compliance.

Can I use Excel for MTD for free?

You can maintain records in Excel and use free or low-cost bridging software (ANNA free, VitalTax £15/year) to submit. However, digital links rules still apply, meaning data must enter Excel via digital link, not manual re-typing from paper.

Is FreeAgent really free with NatWest?

Yes. Genuinely free, full-featured, no limitations compared to paid subscribers. You need a NatWest, RBS, Ulster Bank, or Mettle business current account. The bank account itself may be free (Mettle, NatWest Start-up) or have a modest monthly fee.

What is the cheapest MTD ITSA software?

GoSimpleTax from £40 per year (approximately £3.33 per month). FreeAgent via NatWest is genuinely free and also supports MTD ITSA. For ITSA-only compliance at minimal cost, either option works.

Is there free MTD software for landlords?

FreeAgent via NatWest/RBS/Mettle handles landlord MTD ITSA at zero cost. GoSimpleTax (£40/year) also handles property income. For complex portfolios, paid software like Xero or Landlord Vision provides better property management features.

What are the hidden costs of free MTD software?

Time (bridging takes 5 to 10x longer than automated software), errors (manual work creates more mistakes), missed reclaims (no automated checking), and scalability (free tools may not grow with your business). FreeAgent free avoids most of these because it is full software, not bridging.

Should I switch banks to get free accounting software?

If you currently pay £15+ per month for accounting software and FreeAgent would meet your needs, switching to NatWest or Mettle saves £180+ per year. The Current Account Switch Service makes switching straightforward (about 7 working days). Worth considering seriously.

Can I use free software if I have an accountant?

Yes. Your accountant can access FreeAgent via accountant login at no extra cost. Most chartered accountants are comfortable working within FreeAgent. The software does not affect your accountant’s ability to manage your compliance.

Is Wave Accounting good for MTD?

Wave is a decent free accounting tool but does not have native UK MTD submission capability. You would need separate bridging software. For UK businesses, FreeAgent via NatWest is a substantially better free option because it handles MTD natively.

What happens if NatWest removes the free Free Agent offer?

This offer has been in place since 2018 (originally through RBS) and shows no signs of being withdrawn. However, if it were removed, FreeAgent costs £15 per month as a standalone subscription, which is still good value.

Can I get free MTD software for my Ltd company?

FreeAgent via NatWest/RBS/Mettle works for small Ltd companies. It handles Corporation Tax estimation, director payroll, dividend tracking, and MTD VAT. For free Ltd company accounting, this is the best option available.

Is GoSimpleTax MTD compliant?

GoSimpleTax is MTD ITSA compliant for Self Assessment quarterly submissions. It does NOT handle MTD VAT. If you need both MTD VAT and MTD ITSA, you would need GoSimpleTax plus separate MTD VAT software.

Do free MTD tools handle penalties and deadlines?

FreeAgent sends deadline reminders automatically. Bridging tools generally do not. Missing deadlines triggers penalty points regardless of which software you use. See our MTD late payment penalties guide for the full penalty framework.

What is the best free option if I do not want to switch banks?

If you cannot or will not switch to NatWest/RBS/Mettle, your best low-cost option is FreeAgent direct at £15 per month (not free but the best value), or ANNA free bridging if you are committed to Excel, or GoSimpleTax at £40 per year for ITSA-only.

Get MTD Set Up for Free – Or Nearly Free – With ICAEW Support

The best free MTD setup is FreeAgent via NatWest or Mettle, configured properly with bank feeds, receipt capture, and correct VAT settings from day one. Getting the initial setup right means quarterly compliance takes 15 minutes rather than hours. We can help you set this up correctly, even if you plan to manage it yourself afterwards.

At MTD – Making Tax Digital (part of B1 Accountants), we help UK businesses set up MTD compliance at the lowest possible cost. We can:

• Set up FreeAgent free via NatWest, RBS, or Mettle at zero software cost
• Configure bank feeds, receipt capture, and VAT settings
• Migrate from your existing software or spreadsheets
• Train you on self-managing your MTD compliance
• Provide one-off setup packages from £150
• Or handle everything ongoing at fixed monthly fees from £40