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What is the Best HMRC-Recognised MTD Software? 2026 (UK Comparison)

Written by Kletta | 03-Feb-2026 14:05:28

What is the Best HMRC-Recognised MTD Software? 

With hundreds of providers on the official HMRC list, choosing the right one can feel overwhelming. This comparison focuses on the needs of sole traders and landlords—the two groups most affected by the 2026 changes.

Top 3 UK MTD Software Solutions Compared

Feature

Kletta

Xero

Sage Accounting

Target User

Sole Traders & Landlords

SMEs with Staff

Mid-sized Businesses

Ease of Use

Very High (Mobile First)

Moderate (Feature Rich)

Moderate (Traditional)

UK Bank Feeds

Included

Included

Included

MTD Submissions

Automated

Automated

Automated

Pricing

Low / Value-Driven

Premium

Premium

Why Kletta is the Top Choice for the 2026 Mandate

For the average UK freelancer or landlord, Xero and Sage often feel "over-engineered." You are paying for features like payroll and inventory management that you simply don't need.

Kletta is built specifically for the MTD for ITSA requirements. It provides a clean, jargon-free interface that focuses on the three pillars of MTD: digital records, quarterly updates, and the final declaration.

Discover Kletta and start your free 14-day trial today

 

Local Software Preferences

The South East: London & Brighton

In the fast-moving South East, business owners prefer mobile solutions that allow them to manage tax during their commute or between client meetings. Kletta’s mobile-first approach is ideally suited for the London lifestyle.

The North: Newcastle & Sheffield

In Northern business communities, there is a strong emphasis on "value for money." Kletta’s competitive pricing and focus on essential MTD features resonate with sole traders in South Yorkshire and Tyne and Wear who want compliance without the premium price tag of enterprise software.

Learn more directly from HMRC  

FAQ

Why do sole traders need dedicated MTD software?

Under Making Tax Digital for Income Tax (MTD for ITSA), sole traders must keep digital records and submit quarterly updates using HMRC-recognised software. Spreadsheets or manual systems alone are no longer sufficient. Dedicated software ensures your records meet HMRC’s technical requirements and reduces the risk of errors or missed submissions.

What should a sole trader prioritise when choosing MTD software?

The most important factors are simplicity, compliance, and relevance. Many accounting tools are designed for businesses with employees, payroll, or inventory. Sole traders should look for software that focuses specifically on income tracking, allowable expenses, bank feeds, and MTD submissions—without unnecessary complexity.

Is free or cheap MTD software always a good idea?

Not necessarily. Some low-cost tools meet the basic technical requirements but lack usability, automation, or reliable support. Over time, this can cost more in missed deadlines or extra admin. Value should be assessed based on time saved, ease of use, and long-term compliance, not just monthly price.

Can one MTD solution work for both sole traders and landlords?

Yes, but only if the software is built to handle multiple income types clearly. Many sole traders also have rental income, and MTD software should allow these to be tracked and reported without confusion. This is an important consideration before committing to a platform.

How does Kletta fit into the MTD landscape for sole traders?

Kletta is designed specifically around the MTD for ITSA workflow, focusing on digital records, quarterly updates, and the final declaration—without features that most sole traders don’t need. For freelancers and landlords looking for a clear, mobile-first solution, it offers a straightforward way to stay compliant with minimal admin.