MTD Software Comparison: Xero vs FreeAgent vs Quartax
Which MTD software is right for landlords and sole traders?
With Making Tax Digital mandatory from April 2026, choosing the right MTD software matters. This MTD software comparison looks at Xero, FreeAgent, and Quartax -three options that can help you submit quarterly updates to HMRC. Each has different strengths depending on whether you need full accounting, invoicing, or a simple MTD filing workflow.
Xero
Xero is a full-featured cloud accounting platform. It offers invoicing, bank feeds, expense tracking, inventory, and MTD ITSA compliance. Pricing typically starts around £15–£30 per month depending on plan. Xero suits businesses that want full double-entry bookkeeping, multi-currency, and integrations with hundreds of third-party apps. For a landlord or sole trader who only needs to file MTD returns, Xero can feel like overkill -and the monthly cost adds up. Bank feeds require linking your account; if you prefer not to connect your bank, you can manually import transactions but the workflow is more involved.
FreeAgent
FreeAgent is popular with freelancers and small businesses. It offers invoicing, bank feeds, expense management, and MTD ITSA. FreeAgent is free for NatWest, Royal Bank of Scotland, and Ulster Bank business customers via Mettle (NatWest's digital banking brand). Otherwise, plans start around £24–£35 per month. FreeAgent is intuitive and MTD-compliant. Like Xero, it's built for full accounting. If you only need to file quarterly MTD updates and don't need invoicing or full accounting, you may be paying for features you won't use.
Quartax
Quartax is built specifically for MTD ITSA. No bank feeds, no invoicing -just upload your bank statement CSV, review AI-categorised transactions, and submit to HMRC. We support Barclays, Lloyds, HSBC, NatWest, Monzo, Starling, Halifax, and Santander. £39/year for one income source. First return free. Quartax is ideal if you want a focused MTD workflow without the complexity of full accounting software. You keep control: no bank login required, just upload when you're ready to file.
Bridging software and spreadsheets
If you prefer spreadsheets, you can use bridging software that links your spreadsheet to HMRC and submits the data. This is MTD-compliant but requires manual data entry each quarter. Full software like Xero and FreeAgent, or focused MTD tools like Quartax, automate more of the workflow. Quartax uses AI to categorise transactions from your bank CSV, so you spend less time on data entry and more time reviewing.
MTD software comparison: quick summary
Choose Xero if you need full accounting, invoicing, and multi-currency. Choose FreeAgent if you're a NatWest/RBS customer (free) or want a full accounting suite. Choose Quartax if you want the simplest path to MTD compliance -upload, review, submit -without paying for features you don't need. All three are HMRC-compliant and submit directly to MTD. The right MTD software depends on your business complexity and budget. HMRC publishes a full list of compatible software at gov.uk.
Before you start
You'll need these in place before connecting Quartax to HMRC. Not sure if you need MTD? Check HMRC's eligibility tool.
- A Government Gateway account - you use this to log into HMRC services. If you don't have one, create one at gov.uk.
- Self Assessment registration - you must be registered for Self Assessment with HMRC. If you're not, register at gov.uk.
- MTD ITSA enrolment - HMRC must have enrolled you in Making Tax Digital. You'll receive a letter or can check your Personal Tax Account.
- A bank statement CSV - download your transactions for the quarter from your bank's app or website. Make sure it covers only the quarter you're filing for.
Not sure if you're ready? Email us at team@quartax.co.uk and we'll help.
Ready to simplify your MTD filing?
Try Quartax -upload, review, submit. First return free.