MTD-compatible software: what "compatible" actually means

Quarterly updates and the Final Declaration cannot be filed directly through an HMRC online account — both must go through software tested and recognised by HMRC.

What "compatible" actually means

HMRC maintains an official list of software recognised as compatible with the MTD API, the technical connection that lets a product submit data directly to HMRC. Being on that list means a product has passed HMRC's technical testing — nothing more. It is not a quality rating or an endorsement, and HMRC does not recommend one product over another.

Two points are easy to miss. A plain spreadsheet does not count on its own, however meticulous the records — the data has to flow digitally into recognised software, either entered directly into full accounting software or connected via bridging software. Typing totals from a spreadsheet into HMRC's portal by hand does not meet the requirement either; the link between records and submission has to be digital throughout, not manually re-entered at the final step. A product absent from HMRC's official list cannot be used to file quarterly updates or the Final Declaration, and the list changes regularly enough to warrant checking before committing to anything.

Two broad categories

Bridging software sits on top of records already kept in a spreadsheet. Income and expenses continue to be recorded in Excel or Google Sheets as before; the bridging tool extracts summary totals and submits them through the required digital link. This suits anyone who doesn't want to change day-to-day record-keeping, and tends to be the cheaper category — some options run at well under £40 a year.

Full accounting software handles bookkeeping, invoicing, bank feeds and MTD submission in one platform, suited to anyone wanting automatic reconciliation and comfortable moving away from a spreadsheet-based workflow. Pricing ranges from free tiers with restrictions to more comprehensive paid plans.

Where free options sit

HMRC does not build or provide its own MTD software. Every compatible product, free or paid, comes from a third-party commercial provider — HMRC's role is testing and recognition, not development. No "official HMRC app" exists.

A number of third-party products offer genuine free tiers rather than time-limited trials, though most carry a restriction: a transaction limit, a turnover ceiling, or a single-income-source limit. Some are built for a single trade with low transaction volume. Some are free only below a certain turnover, or below a certain number of properties for landlord-focused tools. A handful of accounting platforms tie a free plan to holding a business account with a specific bank. The cheapest paid bridging software, for anyone keeping a spreadsheet, tends to sit at a low flat annual fee rather than a monthly subscription. Because pricing in this market changes often, any specific product name or price should be treated as a starting point to verify against the provider's current page and HMRC's live list, not a fixed recommendation.

What actually matters when choosing

Whether a product is on HMRC's current recognised list is non-negotiable and worth checking every time, even for a familiar product. Whether it handles the relevant income types matters next — a sole trader who is also a landlord needs software that explicitly supports separate quarterly updates per income source, since some budget and mobile-first tools handle only a single stream cleanly. Whether it matches existing record-keeping habits matters too: bridging software suits anyone comfortable in a spreadsheet, while full accounting software with bank feeds suits anyone wanting automation. Anyone working with an accountant should confirm their preference before committing, since using the same platform can save time at year-end.

No product is being recommended here

This site has no affiliate relationship with any accounting software provider, so this is not a ranked list. The right choice depends on individual setup — testing a free tier or trial against real records before committing to anything paid is the more reliable approach than following a recommendation.

Not sure software is needed yet?

Our MTD Readiness Checker confirms whether MTD applies before software needs choosing at all.

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This is general guidance, not professional tax advice. Software providers, pricing and free-tier terms change frequently — check current details with the provider and confirm status on HMRC's compatible software list before choosing.