Free HMRC Accounting Software 2026: What’s Actually Free (and What Isn’t)

HMRC does not make its own free accounting software. It never has for Income Tax, and its free online VAT return service closed when Making Tax Digital became mandatory. So when people search for free HMRC accounting software, what they are really looking for is commercial software that HMRC recognizes, software that happens to be given away free, either permanently, on a limited tier, or bundled with a business bank account.

The good news is that genuinely free options exist, and several of them meet HMRC’s requirements in full. The catch is that a few platforms advertise “free” and then put the actual submission behind a paywall, which you only discover at the point you try to file.

We set up MTD software for sole traders and landlords every week, so this guide is written from what actually happens when people use these tools, not from a features list. We cover what is genuinely free, where each free option stops being enough, and what the cheapest paid alternatives cost if you outgrow it.

Does HMRC provide free accounting software?

No. HMRC does not provide its own accounting software, free or paid, for Making Tax Digital for Income Tax. It publishes a list of software from commercial providers that it recognizes, some of which are free, but the list is not software itself.

This trips a lot of people up, so it is worth being precise about three things:

• For Income Tax (MTD ITSA), there has never been an HMRC tool. From the start, HMRC’s position has been that the software market provides the products and HMRC approves them.
• For VAT, HMRC did once have a free service, and it has closed. The old online VAT return form was withdrawn when MTD for VAT became mandatory for all VAT-registered businesses. You now have to use recognised software, though as this guide shows, that software does not have to be paid for.
• “HMRC recognised” is not the same as “HMRC provided.” Recognition means the software has been tested against HMRC’s API and is permitted to submit. It says nothing about price, quality or support.

You can check any product against HMRC’s own list on GOV.UK before you commit to it. If a product is not on that list, it cannot legally submit your quarterly updates, no matter what its marketing says.

If you are still working out whether MTD applies to you at all, start with our guide to what Making Tax Digital actually is before choosing software.

Genuinely free MTD software for Income Tax

These are the options that are free and HMRC-recognised for MTD for Income Tax. For each one, the important column is the last one, what the limit is. That is the part most comparison articles leave out, and it is the part that decides whether free will actually work for you.

The bank-account route is the best free deal; with one condition

The strongest free offers are the ones attached to business bank accounts. FreeAgent through NatWest, RBS, Ulster Bank or Mettle, and the MTD tool built into Monzo Business, are full products rather than cut-down tiers. If you are opening a business account anyway, this is the cheapest legitimate route to MTD compliance there is.

The condition is that it is not really free, it is bundled. If you close the account, or in some cases if the account goes dormant, the software access goes with it. That is fine if the account is your main one. It is a problem if you opened it purely to get the software.

The free-tier route suits simple affairs

Clear Books, Zoho Books, Pandle and My Tax Digital take a different approach: a genuinely free tier of a paid platform. These work well if your affairs are simple, one trade, modest transaction volumes, no payroll, no complex expense categories.

They start to strain when you have several income sources, VAT on top of Income Tax, or enough transactions that manual categorising eats real hours every quarter.

For landlords specifically

Landlord Studio’s free tier is built around property rather than retrofitted onto general bookkeeping, which matters more than it sounds. Per-property profit and loss is the thing generic software handles badly, and it is exactly what you need when you are working out what any individual property actually earns.

The free tier limits property count, so it suits one or two properties rather than a portfolio. If you have several, read our guide to MTD accounting for landlords, the admin load scales faster than people expect.

Free MTD software for VAT

The free market for VAT is a different market with different winners, so do not assume the product that suits your Income Tax filing also covers VAT.

Broadly there are two free routes. Free bridging software connects an existing VAT spreadsheet to HMRC and submits from it, suitable if your records are already well structured in Excel. Free VAT tiers on platforms like QuickFile, My Tax Digital and ANNA let you file VAT returns at no cost, usually with limits on volume or features.

One thing to be careful about: bridging keeps your spreadsheet, but MTD still requires digital links between the cells and the submission. Copy-pasting figures between sheets breaks that chain, and the penalties for it are not trivial.

If you file VAT from a spreadsheet, read our guide to MTD bridging software for spreadsheets and our MTD for VAT guide before you choose.

Cheapest paid MTD software if free isn’t enough

If you have read the catches above and concluded that free will not stretch far enough, the next question is what the cheapest reliable option costs. The budget end of the market is cheaper than most people assume.

The honest comparison is not free versus paid. It is whether the cheapest paid tier removes enough friction to be worth it. For most sole traders the gap between free and the cheapest paid option works out at roughly the cost of a takeaway per month, so the real question is not price at all.

For a full comparison of the paid platforms against each other, see our guide to the best MTD software in the UK.

Free vs paid over a full tax year

MTD for Income Tax means four quarterly updates and a Final Declaration every year, five submissions, not one. That changes the maths considerably compared with the old annual Self Assessment.

The column that actually decides it is the time one. Four quarterly updates at two or three hours each is a working week a year. Free software is excellent value when your affairs are simple. It gets expensive, in the only currency that matters, when they are not.

What free software will not do for you

This is worth saying plainly, because it is the gap that causes the most expensive mistakes we see.

Free software submits what you put into it. It does not check whether what you put in is right. Specifically, it will not:

• Check your figures before they go to HMRC. If you have miscategorised an expense or missed an income source, the submission goes anyway.
• Find the reliefs and allowances you are entitled to. Capital allowances, the trading allowance, pension relief and for landlords, the Section 24 finance cost credit are claimed at the Final Declaration, and software does not go looking for them.
• Tell you whether you are even in scope. Qualifying income is calculated on gross turnover before expenses, which catches people out routinely.
• Help you if HMRC opens an enquiry. You are on your own at that point.

None of that makes free software a bad choice. It makes it a tool rather than a safety net, and that distinction is the whole decision.

Frequently asked questions

Does HMRC offer its own free accounting software? No. HMRC has never provided its own software for MTD for Income Tax, and its free online VAT return service closed when MTD for VAT became mandatory. HMRC publishes a list of recognised commercial software, some of which is free, but it does not build software itself.

Is there genuinely free MTD software for Income Tax? Yes. Several HMRC-recognised platforms are free, either permanently on a limited tier or bundled with a business bank account. FreeAgent through NatWest, RBS, Ulster Bank or Mettle, and the MTD tool built into Monzo Business, are the strongest examples because they are full products rather than cut-down versions.

Can I use one free product for both VAT and Income Tax? Sometimes, but do not assume it. The free VAT market and the free Income Tax market have different leaders, and several products are recognised for one but not the other. Check both on HMRC’s recognised software list before committing.

What is the cheapest MTD software in the UK? Bridging software is usually the cheapest paid route, charging either per submission or a small annual fee, because it keeps your existing spreadsheet and only adds the submission step. Entry tiers of the mainstream accounting platforms are the next step up.

Is free accounting software HMRC-recognised? Some of it is and some of it is not. Being free has no bearing on recognition, what matters is whether the product appears on HMRC’s compatible software list. Never assume; check the list.

Can I file my Self Assessment for free under MTD? Under MTD for Income Tax, the annual Self Assessment return is replaced by four quarterly updates and a Final Declaration. Free recognised software can handle all five submissions, provided the product you choose covers the Final Declaration as well as the quarterly updates, not all free tiers do.

Not sure which free option fits you?

We set up MTD software for sole traders and landlords, and MTD accounting for self employed every week, and we will tell you honestly if a free tool is enough for your situation. We would rather you spent nothing on software than spent money on the wrong thing.