Choosing the best MTD Software for your business
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Making Tax Digital (MTD) is HMRC’s move to digital record-keeping and online submissions. In practice, this means using approved accounting software to keep accurate books, send VAT or income tax updates, and reduce the risk of missed deadlines.
The right tool should make Making Tax Digital compliance simpler, not create extra admin. With the right setup and regular support, going digital saves time, improves accuracy, and gives you a clearer picture of your finances.
What does ‘MTD-compatible’ software mean?
MTD-compatible software is approved by HMRC. It supports digital records and sends your VAT returns, and in future Income Tax Self-Assessment updates, from the system to HMRC.
When choosing a platform, you should check that it:
- Appears on HMRC’s recognised list
- Supports secure digital submissions
- Provides a clear audit trail for every transaction
These are the essentials for MTD compliance. The best systems go a step further by making everyday accounting easier through automation, linked bank feeds, and simple reporting features that save you time and effort.
MTD software options
Here are three well-known, HMRC-listed tools that suit most SMEs:
- Xero offers a clean, modern interface, strong automation, and a wide range of integrations. It’s a great option for teams that value collaboration and steady, scalable growth.
- QuickBooks provides dashboards and instant visibility into cash flow. It’s well-suited to business owners who want a quick visual overview of their finances alongside reliable bookkeeping tools.
- FreeAgent is designed for freelancers and smaller companies. It includes time tracking, expense recording, and invoicing in one place, making it ideal for contractors and sole directors.
At Mollan & Co, we support clients using all major MTD software platforms. However, we often recommend Xero for growing businesses because it strikes a good balance between simplicity, flexibility, and integration with the tools you already use.
How Much Does MTD Software Cost?
Entry-level plans are designed for sole traders and very small teams, and they typically have low monthly costs. As you grow, you can move to higher tiers that add advanced reporting, payroll options, or project tracking.
What to look for in MTD software
When comparing different MTD options, focus on features that genuinely make your day-to-day work simpler.
- Ease of use. Clear menus, sensible workflows, and a mobile app you’ll actually use.
- Live figures. Accurate cash position, VAT liability, and key reports available when you log in.
- Cloud access. Work from anywhere and share access with your accountant securely.
- Bank feeds, recurring invoices, and rules that tidy transactions as they arrive.
- Quick views of profit, cash flow, and VAT, plus exportable reports for better decision-making.
Different users benefit from different setups, so be sure to match the features to your needs.
- Contractors often need simple tools for invoicing, time tracking, expense capture, and mileage.
- Landlords benefit from property-by-property income and expenses, making submissions simpler.
- Small businesses usually require multi-user access, reliable VAT workflows, and integrations with payment and payroll to keep everything joined up.
How Mollan & Co can help
Implementing the right software is where the real value of MTD lies.
At Mollan & Co, we’ll help you:
- Choose the right HMRC-recognised tool for your business, then configure it properly.
- Connect bank feeds, tidy your chart of accounts, and migrate existing data.
- Train you, or your team, so the system fits how you work.
- Run ongoing VAT submissions and provide year-round support, with clear answers when you need them.
We have supported local companies in York and the surrounding areas for more than 40 years.
Not sure which MTD software is right for you?
We will help you choose the best fit for your business and get it implemented quickly, so you can submit to HMRC with confidence and spend more time on the work that matters. Get in touch today.
Author ProfileI'm the owner and Managing Director of Mollan & Co Accountants. I'm a skilled and efficient accountant with more than 20 years of experience in the industry.
I developed valuable skills in business and commercialisation through my work in the science and technology departments within the Scottish University sector. Then, in 2001, I formed my own internet-based marketing company, producing and distributing 360° virtual reality tours for the Scottish tourism sector.
I now use my commercial skills, expert tax knowledge and first-hand experience to help other businesses grow and flourish through strong accounting practice.
Our success at Mollan & Co is directly related to the success of our clients.
