Comparison table of HMRC free MTD bookkeeping software features

Comparing HMRC free MTD software: Which bookkeeping tool is right for you?

Choosing the right bookkeeping software, including HMRC free MTD software, can save you hours of admin, keep your tax obligations on track and help you run your business with ease. But with so many options out there, it can be tricky to know which one ticks all the boxes.

Whether you’re self-employed, a landlord or a CIS subcontractor, you need software that keeps pace with your business offering everything from invoicing and receipt capture to automated categorisation and tax estimation throughout the year.

Badge of FCA Authorised

What is MTD?

Making Tax Digital (MTD) is a UK government initiative designed to make it easier for businesses to manage their taxes digitally. Using HMRC free MTD software or other MTD-compliant tools ensures your quarterly updates and end-of-year submissions are simpler, faster and more accurate. Choosing software that fully supports MTD can save you time and stress when it comes to managing your finances and staying compliant.

Feature comparison at a glance

!Coconut Logo

Sage

(Sole Trader subscription)

FreeAgent

Clear Books

(Free subscription)

Quarterly updates

Yes
Yes
Yes
Yes

End of year MTD tax return

Yes
Yes
Yes
Yes

Invoicing

Unlimited and customisable
5 invoices only per month
Unlimited and customisable
Unlimited but not customisable

Receipts

Unlimited and can upload via app scan and web
5MB upload only and can upload via app scan
10 smart captures per month only then £5 after
Unlimited manual upload

Bank feed

Unlimited bank connections
1 bank only
Yes
1 free bank connection

Auto transaction categorisation

Unlimited
2 per month
Unlimited
£15 per month

Tax estimation

In-year estimate
No
In-year estimate
In-year estimate

Landlord features

Yes including property income and categories
Yes
Yes
Yes

Accountant access

Yes
Yes
Yes
Yes

UK-based company

Yes
Yes
Yes
No

Free plan

Free for 2 years with Zempler
Yes
Free with certain banks
Yes

Support available

Web chat, email and support centre
Self-serve
Web chat, email and support centre
No phone, email or community

Suitable for small businesses

Yes
Yes
Yes
Yes

Storage capacity

Unlimited
125MB
1GB
Unlimited

HMRC recognised for MTD

Yes
Yes
Yes
Yes

Tax tips

Yes
No
No
No

Competitor breakdown

Pros:

Unlimited invoicing, receipt capture and storage, automated transaction categorisation, connects to 30+ banks, full MTD compliance, UK-based support and free for 2 years with Zempler.

Cons:

Very few limitations for typical self-employed use.

Sage

(Sole Trader subscription)

Pros:

MTD-compliant and free to use.

Cons:

Limited invoicing, storage and bank connections with a very basic auto-categorisation and self-serve support only.

FreeAgent

Pros:

Unlimited invoicing, MTD-compliant, in-year tax estimates and UK-based support.

Cons:

Limited receipt smart capture unless you pay, pricing can increase for more advanced features, and it may be less suited to more complex or larger businesses.

ClearBooks

(Free subscription)

Pros:

MTD-compliant and connects to multiple banks.

Cons:

No invoicing branding, limited support, auto-categorisation only in paid version and not UK-based.

Ready to make Making Tax Digital for Income Tax simpler?

If you want HMRC free MTD software that grows with your business, simplifies MTD submissions and removes the headache of manual admin, Coconut is the right fit.