What is the best free MTD software?
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FreeAgent is the most capable free option if you bank with NatWest, RBS, Mettle, or Ulster Bank. Pandle and Coconut offer free starter tiers for simpler needs.
Is there any genuinely free MTD software?
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Yes. FreeAgent (with qualifying bank), Pandle (free tier), and Coconut (free tier) are all genuinely free for basic MTD VAT and, in some cases, ITSA.
What is the cheapest paid MTD software?
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Pandle and Coconut start at £0. Among paid-only platforms, QuickBooks Simple Start and Zoho Books Standard are the cheapest at around £10/month.
How much does Xero cost per month?
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Starter is approximately £14/month. Standard is ~£28/month. Premium is ~£36/month. Payroll and Analytics Plus are extra.
How much does QuickBooks cost per month?
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Simple Start is ~£10/month. Essentials is ~£18/month. Plus is ~£28/month. Advanced is ~£40+/month. Payroll is additional.
How much does Sage cost per month?
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Sage Accounting Start is ~£14/month. Standard is ~£28/month. Plus is ~£36/month. Payroll and additional users cost extra.
Does FreeAgent have a free trial?
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Yes. FreeAgent offers a 30-day free trial even if you do not have a qualifying bank account. If you do have one, the ongoing subscription is free.
Does Xero have a free trial?
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Yes. Xero offers a 30-day free trial with no credit card required.
Does QuickBooks have a free trial?
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Yes. QuickBooks typically offers a 30-day free trial. They also frequently run "£1 for 3 months" introductory offers.
Can I get MTD software for £1?
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QuickBooks frequently offers £1/month for the first 3 months. This is an introductory price that reverts to the full monthly rate after the period ends.
Are there student discounts?
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Some providers offer education pricing. Contact Xero, QuickBooks, or Sage education teams directly. FreeAgent does not have a student discount but is free with qualifying banks.
Can I negotiate software pricing?
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Standard SaaS pricing is usually fixed. However, accountants with partner status sometimes offer discounted rates. Large businesses may qualify for volume pricing.
What does MTD software actually do?
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It keeps digital records of your income and expenses, calculates your VAT or ITSA figures, and submits them directly to HMRC via API.
Do I need cloud software or can I use desktop?
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Desktop is allowed but must connect to HMRC digitally. Most modern desktop packages lack MTD APIs, so cloud software is the practical choice for most.
What is a bank feed?
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A bank feed automatically imports your bank transactions into your accounting software daily. It eliminates manual data entry and reduces errors.
Does all MTD software have bank feeds?
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Most cloud software does. Bridging tools do not. Pandle's free tier has limited feed support. Always check if your specific bank is supported.
What is auto-categorisation?
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Machine learning that guesses the category of each imported transaction based on past behaviour. QuickBooks and Coconut are strongest at this.
Does software handle my VAT scheme?
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Most handle standard and cash accounting. Flat rate is supported by Xero, QuickBooks, Sage, and FreeAgent. Margin scheme and TOMS require specialist tools.
Can software handle CIS?
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Xero, QuickBooks, Sage, and FreeAgent handle CIS. Sage is particularly strong. Coconut and Pandle have limited CIS support.
Does software handle EU VAT?
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Xero and Sage have the most mature post-Brexit EU VAT features. Check OSS/ICS support if you sell to Northern Ireland or the EU.
Can software track inventory?
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Xero, QuickBooks Plus, Sage Standard, and Zoho Books handle inventory. FreeAgent, Pandle, Coconut, and bridging tools do not.
Does software handle payroll?
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Most offer payroll as a paid add-on. Xero Payroll, QuickBooks Payroll, and Sage Payroll integrate with the main accounting platform.
Can I create invoices in the software?
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Yes. All cloud platforms include invoicing. FreshBooks and QuickBooks have the most polished invoice designs.
Does software handle mileage?
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QuickBooks has built-in mileage tracking. Xero integrates with third-party apps. FreeAgent and Sage allow manual mileage logging with simplified expense rates.
Should I start with free or paid?
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Start with free if you have simple income, no inventory, and one bank account. Upgrade to paid when you need multi-user, inventory, or advanced reporting.
When should I upgrade from free?
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When you hit transaction limits, need inventory, want automatic bank feeds, or have multiple users. The time you save usually pays for the subscription.
Is paid software worth it for a side hustle?
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If your side hustle is under £30k and simple, free software is fine. If it is growing quickly or you hate bookkeeping, £10/month for automation is worth it.
Can I downgrade from paid to free?
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Usually yes, but you may lose features and data access. Export everything before downgrading. Some platforms do not allow reverting to free once upgraded.
Do I need paid software for VAT?
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Not necessarily. FreeAgent, Pandle, and Coconut handle VAT MTD for free. However, if your VAT is complex (margin scheme, partial exemption), you may need paid features.
Do I need paid software for ITSA?
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FreeAgent and Coconut handle ITSA for free. Pandle is still developing ITSA. If you need ITSA now and want zero cost, choose FreeAgent or Coconut.
Is bridging software better than free cloud?
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Usually no. Bridging costs £5/month and still requires manual spreadsheet work. Free cloud software like FreeAgent automates bank feeds and filing for £0.
What is the best value MTD software?
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FreeAgent is unbeatable if you qualify for free banking. Among paid options, Zoho Books offers the most features per pound at £10/month.
Which software has the best free trial?
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Xero and QuickBooks offer 30 days with full features and no credit card. Sage often offers 3 months free with partner accountants.
Can I use multiple free trials?
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Yes. Try Xero for 30 days, then QuickBooks for 30 days. This gives you two months to decide without spending anything.
Is there a lifetime free plan?
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Pandle's starter tier and Coconut's free tier are ongoing, not trials. FreeAgent is ongoing if you maintain the qualifying bank account.
Do free plans have ads?
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No reputable accounting software shows ads. Free tiers are monetised through upgrade prompts or banking partnerships, not advertising.
What are the hidden costs of Xero?
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Payroll, Analytics Plus, additional users, and some app integrations cost extra. The Starter tier also limits bank transactions.
What are the hidden costs of QuickBooks?
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Payroll, multi-user access, and advanced inventory are extra. The intro price often reverts to full price after 3 months.
What are the hidden costs of Sage?
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Payroll, additional users, and multi-company features add cost. Some advanced reporting is locked behind higher tiers.
Does software charge for support?
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Most include email/chat support in the subscription. Phone support may be limited or reserved for higher tiers. Accountants often provide faster support.
Do I pay extra for bank feeds?
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Bank feeds are usually included in cloud subscriptions. Bridging tools do not include feeds because they read from your spreadsheet instead.
Is receipt capture free?
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Most platforms include basic receipt capture in the mobile app. Advanced document extraction (e.g., Dext) is a paid add-on.
Do I pay for updates?
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Cloud software updates are automatic and included in your subscription. Desktop software may charge for major version upgrades.
Is there a cancellation fee?
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Generally no. Cloud software is month-to-month or annual. You can cancel without penalty, but annual plans usually do not refund unused months.
Can I pause my subscription?
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Some providers allow seasonal pausing. Most do not. You usually cancel and re-subscribe later, though you may lose grandfathered pricing.
Do prices go up every year?
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Most SaaS providers increase prices periodically. Budget for 5–10% annual rises. Introductory rates are not permanent.
Is MTD software tax deductible?
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Yes. Software used for business is an allowable expense and reduces your taxable profit.
Can I claim VAT back on software?
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Yes, if you are VAT-registered. The VAT on your software subscription is input VAT and reclaimable on your VAT return.
Is Xero good for beginners?
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It has a learning curve but excellent onboarding. The Starter tier limits may frustrate fast-growing businesses.
Is QuickBooks good for beginners?
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Yes. QuickBooks has the most beginner-friendly interface and the best mobile app for non-accountants.
Is Sage too complex for small business?
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Sage Start is manageable, but the interface is more traditional. It shines for CIS and construction rather than simple retail.
Is FreeAgent good for limited companies?
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Yes. FreeAgent handles director dividends, corporation tax estimates, and payroll integration. It is surprisingly capable for small limited companies.
Is Pandle too basic?
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For micro-businesses with simple needs, Pandle is perfect. For inventory, multi-currency, or ITSA, it is currently too basic.
Is Coconut only for freelancers?
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It is optimised for sole traders and gig workers. Limited companies can use it but will find the features constrained.
Is FreshBooks good for UK MTD?
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FreshBooks supports MTD VAT well. ITSA support is developing. It excels for time-based billing rather than product businesses.
Is Zoho Books reliable for UK tax?
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Zoho Books is HMRC-recognised for VAT. ITSA is on the roadmap. It is reliable but has a smaller UK accountant network than Xero or QuickBooks.
Is VitalTax easy to use?
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Yes, if your spreadsheet is well-organised. It is a bridging tool, so the ease depends on your source data quality.
Can I trust small software providers?
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Check HMRC recognition. If they are on the official list, they have passed HMRC's technical checks. Pandle and Coconut are well-funded and reliable.
Does HMRC recommend specific software?
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HMRC does not endorse specific brands. They maintain a
recognised software list. Any provider on that list is technically approved.
Can accountants force me to use their software?
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No. You choose your software. However, many accountants have expertise in specific platforms and may charge more to support software they do not know well.
How do I switch from Excel to cloud software?
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Export your contacts and opening balances. Import them into the new software. Connect your bank feed. Run parallel for one month to verify accuracy.
Can I import data from Sage 50 to Xero?
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Yes. Xero has a migration tool for Sage 50. Alternatively, export CSV files and import manually. Accountants often handle this migration.
Can I switch mid-year?
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Yes, but it is messy. Best to switch at VAT quarter end or tax year end to ensure clean opening balances.
Will I lose my old invoices?
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Export and archive them before cancelling. Most platforms allow PDF exports of all invoices and reports.
How long does migration take?
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A simple sole trader: 1 day. A complex business: 1–2 weeks. An accountant-led migration is usually faster and cleaner.
Should I hire an accountant to switch?
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If your data is messy or your VAT is complex, yes. An accountant ensures opening balances reconcile and your first MTD filing is correct.
Find a migration expert →
Can I use two software platforms at once?
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Technically yes, but it creates reconciliation nightmares. Run parallel for one month maximum during a transition, then cut over fully.
What if I cancel and want to return?
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You can usually reactivate within 12 months. After that, your data may be permanently deleted. Export backups before cancelling.
Can I transfer my subscription to my accountant?
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Some accountants include software in their practice fee. You can cancel your direct subscription and use their partner licence instead.
Does switching affect my MTD enrolment?
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No. Your HMRC MTD enrolment is tied to your business, not your software. You simply authorise the new software to submit on your behalf.
Can I keep old software as read-only?
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Some providers allow read-only access for 12 months after cancellation. Others delete data sooner. Always export before cancelling.
What is the best software for a new business?
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FreeAgent (if you can get it free) or QuickBooks Simple Start. Both are easy to learn and scale as you grow.
Is my financial data safe in cloud software?
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Yes. Major providers use bank-grade encryption, SOC 2 data centres, and two-factor authentication. Your data is safer than on an unencrypted laptop.
Who owns my accounting data?
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You do. All reputable providers confirm in their terms that you retain ownership and can export your data at any time.
What happens if the software company fails?
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Major providers (Xero, QuickBooks, Sage) are publicly traded or well-funded with low failure risk. Maintain your own backups regardless.
Does software support two-factor authentication?
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Yes. Enable 2FA immediately on all platforms. It protects your financial data even if your password is compromised.
Can my accountant access my software?
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Yes. Invite them as a user with advisor permissions. Do not share your personal login credentials.
What support do free plans include?
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Varies. FreeAgent free tier includes email support. Pandle free tier includes community support. Paid tiers usually include faster, dedicated support.
Is there 24/7 support?
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Xero and QuickBooks offer 24/7 chat. Sage and FreeAgent offer UK business-hours phone and email. Phone support is rare on free tiers.
Can I get training on the software?
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Yes. All major providers offer free webinars, video tutorials, and help centres. Some offer paid certification courses.
Does software work offline?
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Cloud software requires internet to sync. Some mobile apps allow limited offline entry, but you must reconnect to sync and submit to HMRC.
Can I use software on my phone?
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Yes. All major providers have iOS and Android apps for receipt capture, invoice creation, and dashboard review.
Can I export data to Excel?
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Yes. All platforms allow CSV or Excel exports of transactions, reports, and contact lists for backup and analysis.
What if I have no internet access?
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Cloud software requires internet. If your location has no reliable connection, you may qualify for a digital exclusion exemption from HMRC.
What is the best software for retail?
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Xero or QuickBooks integrated with your EPOS (Square, Zettle, Lightspeed). For inventory, choose QuickBooks Plus or Zoho Books.
What is the best software for restaurants?
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Xero or QuickBooks with EPOS integration. Ensure the EPOS pushes daily sales and VAT-split data automatically.
What is the best software for e-commerce?
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Xero or QuickBooks with A2X or Link My Books for Amazon/Shopify. Zoho Books for inventory-heavy stores.
What is the best software for consultants?
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Xero, FreeAgent, or FreshBooks. FreshBooks excels at time tracking and retainer billing for project-based consultants.
What is the best software for tradespeople?
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QuickBooks for mobile invoicing and mileage. Xero for growth and multi-employee tracking. Sage for CIS-heavy construction work.
What is the best software for charities?
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Xero or QuickBooks for trading subsidiaries. Sage for larger charities with complex grant and donor tracking.
What is the best software for dentists?
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Xero or QuickBooks for private practices. Sage for multi-practice dental groups with payroll integration.
What is the best software for lawyers?
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Xero integrates with legal practice management systems. Sage is also popular for client money and trust accounting.
What is the best software for agencies?
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Xero with project tracking or FreshBooks for time-based billing and retainer management.
What is the best software for salons?
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Xero or QuickBooks integrated with Fresha or Treatwell for appointment and payment syncing.
What is the best software for Amazon sellers?
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Xero or QuickBooks with A2X integration. A2X automatically imports Amazon sales, fees, and VAT data.
What is the best software for Shopify stores?
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Xero or QuickBooks with native Shopify integration. Zoho Books also connects well for inventory tracking.
Can I use one software for multiple businesses?
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Some platforms allow multiple organisations under one login (Xero, QuickBooks). Others require separate subscriptions (Sage, FreeAgent).
Can I use UK software if I live abroad?
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Yes. Cloud software is accessible worldwide. Ensure it handles multi-currency if you trade in foreign currencies.
Does software handle Making Tax Digital for ITSA?
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Xero, QuickBooks, Sage, FreeAgent, and Coconut are confirmed ITSA-ready. Verify before April 2026.
Will software prices rise in 2026?
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Likely yes. SaaS providers typically increase prices annually. Budget for 5–10% rises and watch for grandfathered plan protections.
Is there government help to buy software?
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No direct grants for MTD software exist currently. However, software costs are tax-deductible business expenses.
Can I share software with my spouse's business?
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Only if the software supports multiple organisations under one account. Otherwise, each business needs its own subscription.
Does software work with Making Tax Digital for VAT?
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All software on this page is HMRC-recognised for MTD VAT. Always verify the specific version you buy includes the MTD API module.
Can software handle the basis period reform?
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Xero, QuickBooks, and Sage have updated to align with the 6 April to 5 April basis period for sole traders.
What if my software does not support ITSA?
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You will need to switch to an ITSA-ready platform before April 2026 (or April 2027 depending on your threshold). Start evaluating now.
Where can I see live pricing?
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Where can I read ranked reviews?
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Where can I get personalised help?
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We match you with a tech accountant who recommends and configures the right software for your trade.
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