What Software Should I Use for Making Tax Digital (MTD)?

Choosing the right software is one of the most important decisions under MTD.

The good news? You’ve got options.
The better news? We’ll help you choose the right one for your situation.

Do I Even Need Software?

Under MTD, you must:

  • Keep digital records
  • Submit data digitally to HMRC

This means you’ll need either:

  • Accounting software, or
  • Spreadsheets connected to bridging software

👉 The right choice depends on your business, complexity, and preferences.

Our Recommended Software Options

🥇 Xero (Our #1 Recommendation)

Why we recommend Xero

In our experience, Xero is by far the best all-round solution for MTD and modern businesses.

✅ Pros:

  • Extremely user-friendly (even for non-accountants)
  • Real-time bank feeds → no manual input
  • Clean, modern interface
  • Excellent reporting and dashboards
  • Huge range of integrations (payroll, apps, etc.)
  • Fully MTD-compliant
  • Makes collaboration with us seamless

❌ Cons:

  • Monthly subscription cost
  • May be more than you need if your business is very simple

💡 Best for:

  • Growing businesses
  • Anyone who wants clarity and control over finances
  • Clients who want things done properly from day one

👉 Our view: If you want the best experience under MTD, this is it.

🥈 QuickBooks

QuickBooks is another well-known accounting software — and while it can work, our experience has been more mixed.

✅ Pros:

  • Widely used
  • Generally MTD-compliant
  • Competitive pricing

⚠️ Considerations:

  • Interface can feel less intuitive than Xero
  • Bank feeds and automation can be less reliable in practice
  • Reporting is not as clean or flexible
  • Can become clunky as businesses grow
  • We often find more manual intervention is needed

💡 Best for:

  • Very small businesses already familiar with it

👉 Our honest view: It works — but compared to Xero, it often creates more friction than necessary.

🥉 FreeAgent

A simple and affordable option, often bundled with business bank accounts.

✅ Pros:

  • Easy to use
  • Good for freelancers and contractors
  • Often included with certain banks (e.g. NatWest, Mettle)

❌ Cons:

  • Limited functionality compared to Xero
  • Fewer integrations
  • Not ideal for growing or more complex businesses

💡 Best for:

  • Freelancers with straightforward finances

📊 Excel + Bridging Software (Our Simple Option)

For many clients, especially those with simpler businesses, this is a great solution.

✅ Pros:

  • Low cost
  • Simple to understand
  • No need to learn new systems
  • We can manage everything using your bank CSV data

❌ Cons:

  • No real-time dashboard
  • Less automation
  • More reliance on us for reporting

💡 Best for:

  • Smaller businesses
  • Landlords
  • Clients who want a simple, no-fuss solution

So… Which Should You Choose?

Here’s our simple rule:

👉 Want the best long-term solution? → Go with Xero

👉 Want something simple and low-cost? → Excel + us

Everything else sits somewhere in between.

Why Your Choice Matters

The software you choose will affect:

  • How easy MTD is for you
  • How accurate your records are
  • How much time you spend on admin
  • How clearly you understand your finances

👉 The right choice makes MTD feel easy.
👉 The wrong choice makes it feel like a burden.

Our Recommendation (Straight Talk)

If you’re serious about running your business efficiently:

👉 We strongly recommend Xero

It gives you:

  • Better visibility
  • Less admin
  • Fewer errors
  • A much smoother experience overall

What We’ll Do for You

Whichever option you choose, we will:

  • Recommend the best setup for your situation
  • Handle the setup and configuration
  • Train you (if needed)
  • Ensure everything is fully MTD-compliant

Not Sure What’s Right for You?

That’s completely normal — most people aren’t.

👉 Get in touch and we’ll recommend the best option based on:

  • Your business
  • Your budget
  • Your goals