MTD ITSA Nightmare? The 7 Best Apps to Automate Your Tax Returns

Let’s be honest: nobody started their own business because they were passionate about tax compliance. But ready or not, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is coming.

Here is the cold, hard reality: From 6 April 2026, if you earn over £50,000 from self-employment or property, the days of the annual "shoe-box panic" are over. Instead, you will be required to send quarterly updates to HMRC using compatible software. That is four submissions a year, plus a final declaration. That means 4 times as many deadlines in the 2025/2026 Tax Year that you need to remember! Check them all out here before start comparing.

If that sounds like an admin nightmare, you aren't alone. But here is a lesser-known fact that might ease your anxiety: HMRC will not apply penalty points for late quarterly updates for the first 12 months of the mandate. You have a grace period to get this right.

The secret to surviving this shift isn't working harder; it's choosing the right tech. As the number one accounting firm in the UK on Trustpilot, we have tested and reviewed the top players in the market in 2026 to help you find the software that fits your business like a glove.

1. RentalBux

Best For: Landlords and Sole Traders with mixed income.

If you are a landlord, most accounting software feels like trying to fit a square peg in a round hole. RentalBux is different because it was built specifically for property owners who also have self-employment income. It handles the messy stuff, like foreign property income and joint ownership splits, that other apps struggle with.

It effectively kills two birds with one stone: it manages your tenants (lease renewals, safety certs) and handles your MTD compliance.

Pros:

• Cost: Free tier for single-property landlords until March 2028.
• Specialised: Handles complex ownership structures (e.g., 60/40 splits between spouses).
• Comprehensive: Covers UK property, foreign property, and self-employment in one dashboard.

Cons:

• Newer player in the market compared to giants like Sage.
• The free tier is generous, but eventually, you will need to pay as you scale.

Check out RentalBux here

2. FreeAgent

Best For: Banking integration and "hands-off" freelancers.

FreeAgent has a cult following among freelancers for a reason. Its interface is incredibly clean, and if you bank with NatWest, RBS, or Ulster Bank, you might get the software entirely for free. If you`re in two-minds about what bank account to choose as a sole-trader, check our one of the most-read contents this year here.

Their MTD solution is robust. It prompts you to explain bank transactions as they come in, meaning by the time your quarterly update is due, the work is largely done. It feels less like "doing taxes" and more like simple admin.

Pros:

• User Interface: 4.6/5 on Trustpilot for a reason—it’s incredibly intuitive.
• Integration: Seamless bank feeds that automate 90% of the work.
• Value: Often free for business banking customers of specific banks.

Cons:

• Reporting features can be a bit basic for larger, complex businesses.
• Payroll features cost extra if you expand to hiring staff.

Check out FreeAgent here

3. Xero

Best For: Growing small businesses that need an ecosystem.

Xero is the heavyweight champion of cloud accounting. If you plan on scaling your startup into an empire, this is where you start. The beauty of Xero is its ecosystem; it connects with virtually every other app on the planet (from CRM to inventory).

For MTD, Xero provides a streamlined experience, giving you an ongoing view of your estimated tax position and helping to avoid unexpected liabilities at year-end.

Pros:

• Scalability: Grows with you from sole trader to limited company.
• Ecosystem: Over 1,000 app integrations.
• Support: Massive community and learning hub (Xero Central).

Cons:

• Price: It’s on the pricier end of the spectrum (£16-£33+ per month).
• Complexity: Can be overkill if you just have a few invoices a month.

Check out Xero here

4. QuickBooks Online

Best For: AI automation and receipt capture.

QuickBooks is aggressive with its AI. It learns your spending habits fast. If you buy coffee from the same shop every Tuesday, QuickBooks learns to categorise it as "Subsistence" automatically.

Their mobile app is excellent for snapping photos of receipts, which allows you to throw the paper away immediately. For MTD, this digital record-keeping is vital.

Pros:

• Automation: Great AI that reduces manual data entry.
• Mobile App: One of the best for managing business on the go.
• Discount: Frequent 50% off deals for new sign-ups.

Cons:

• Price Hikes: Watch out for price jumps after the introductory offer ends.
• Support: Trustpilot reviews (4.0/5) show mixed experiences with customer service recently.

Check out QuickBooks here

5. TaxCalc

Best For: Bridging software and confident filers.

TaxCalc is a favourite among accountants, but their "MTD Quarterly Filer" is a solid option for individuals who prefer spreadsheets but need a compliant way to send data to HMRC.

It acts as "bridging software." You keep your records in your preferred spreadsheet, import them into TaxCalc, and it handles the digital handshake with HMRC. It’s perfect if you don't want to change your current system entirely.

Pros:

• Simplicity: No need to learn a whole new accounting OS.
• Reliable: Very high trust rating (4.3/5) and excellent stability.
• Cost-Effective: Often cheaper than full cloud suites.

Cons:

• Manual: You still have to maintain your own spreadsheets correctly.
• Interface: Looks a bit more "functional" and dated than Xero or RentalBux.

Check out TaxCalc here

6. Coconut (via GoSimpleTax)

Best For: Gig economy workers and simple sole traders.

Coconut started as a bank account/tax tool hybrid and has evolved into a brilliant app for freelancers. It connects to your bank accounts and categorises expenses specifically for tax returns.

It gives you a real-time estimate of how much tax you owe, so you don't accidentally spend your tax bill. It’s simple, friendly, and designed for people who hate spreadsheets.

Pros:

• Tax Estimates: Real-time visibility on what you owe HMRC.
• Simplicity: Designed specifically for sole traders, not accountants.
• Banking: Connects to 30+ banks easily.

Cons:

• Limited Scope: Not suitable if your business structure becomes complex (e.g., limited company).
• Support: Limited features for complex landlord needs compared to RentalBux.

7. Sage Accounting

Best For: Established businesses and retail.

Sage is the "safe pair of hands." It’s been around forever. While it used to be clunky, their new cloud offering is slick. It’s particularly good if you deal with stock or inventory.

For MTD ITSA, Sage offers a very structured, compliant workflow. It’s less "fun" than the others, but it feels incredibly professional and secure.

Pros:

• Reputation: Trusted by traditional accountants everywhere.
• Features: Strong inventory and stock management tools.
• Support: 24/7 support is often available on higher tiers.

Cons:

• Interface: Can feel a bit corporate and rigid compared to modern apps.
• Price: Tends to get expensive as you add modules.

Check out Sage here

Best MTD Software Comparison: At a Glance

Key Takeaways

• The Deadline is Real: MTD for ITSA starts April 2026 for incomes over £50k.
• Quarterly Updates: You must submit data to HMRC four times a year, plus a final declaration.
• Digital Records: Paper records are no longer compliant. You must use software.
• No "One Size Fits All": Landlords should look at RentalBux; freelancers might prefer FreeAgent or Coconut.
• Don't Panic: You have a 12-month grace period on penalty points for late quarterly updates.

Conclusion

The shift to Making Tax Digital feels daunting, but it’s actually an opportunity to get better visibility on your money. Instead of panicking in January, you will know exactly where you stand all year round.

The right software turns a compliance headache into a simple monthly admin task. Whether you are a landlord needing the specialised tools of RentalBux or a freelancer looking for the automation of FreeAgent, the tools exist to make this easy for you.

Pick your software, link your bank feed, and breathe. You’ve got this.