Which software handles Making Tax Digital and VAT for a UK small business?
Any product on HMRC's recognised list will do it, and for most UK small businesses that means Xero, QuickBooks or FreeAgent, or bridging software if your records stay in a spreadsheet. Every VAT-registered business must keep VAT records and file VAT Returns through compatible software, and sole traders and landlords with qualifying income over £50,000 must also use Making Tax Digital for Income Tax from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. Xero's Ignite plan is £18 a month excluding VAT and files VAT returns, with 20 invoices; FreeAgent is £19 a month for a sole trader and £33 for a limited company, and free while you keep a NatWest, RBS, Ulster Bank or Mettle business account; QuickBooks files VAT from Simple Start up, but Sole Trader Plus cannot. HMRC's finder lists every product, free ones for simple affairs included. This is UK-only; an Indian business files GST instead. Rule: use whatever your accountant already works in.
HMRC's own page saying every VAT-registered business must keep VAT records and file VAT Returns with compatible software, either a full package or bridging software for spreadsheets, and linking to the search service.
HMRC's own timetable for MTD for Income Tax, which reaches sole traders and landlords in stages by qualifying income: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, over £20,000 from 6 April 2028.
HMRC's checklist for picking MTD for Income Tax software: what it must do, what to look for, and the note that free products exist for simple tax affairs, with limits.
HMRC's searchable list of every recognised MTD for VAT product, record-keeping and bridging, filterable by what you need. Every product on it has been through HMRC's recognition process.
Xero's UK prices, for a UK small business that wants HMRC-recognised accounting that files VAT and is MTD for Income Tax ready. Ignite is £18 a month excluding VAT after the introductory offer, with 20 invoices and VAT returns to HMRC; Grow is £39, Comprehensive £55, Ultimate £70.
FreeAgent's UK prices, for freelancers, sole traders and small limited companies: £19 a month for a sole trader, £27 for a partnership or LLP, £33 for a limited company, all excluding VAT, and free for as long as you keep a NatWest, RBS, Ulster Bank or active Mettle business account.
Intuit's UK plans. Simple Start, Essentials, Plus and Advanced all manage and submit VAT to HMRC and are MTD for Income Tax ready; Sole Trader Plus is MTD for Income Tax ready but cannot submit VAT. Prices load live on the page.
