Free MTD ITSA software: what is actually free?

What HMRC means by “free” software

HMRC strongly encourages software providers to offer a free version for businesses with simple affairs. What that looks like in practice varies: some products are fully free for everyone, some are free up to a small client or transaction limit, and some are free for the spreadsheet-bridging step but charge for full bookkeeping features.

“Free” can also mean “free for now, with paid tiers planned later”. It is worth checking the small print and any published roadmap before you commit your records to a particular tool.

Two categories of MTD software

There are two broad categories you will encounter when looking for an MTD ITSA tool:

Full accounting software

End-to-end packages that combine bookkeeping, invoicing, bank feeds, payroll, and the MTD submission step. These are aimed at users who want to move all of their bookkeeping into one product. The free tier, where one exists, often has limits on clients, transactions, or features.

Bridging software

A lighter category that takes records you already keep in a spreadsheet and submits them to HMRC through the MTD API. Bridging software is explicitly supported by HMRC as a valid approach for digital recordkeeping, provided the spreadsheet is digitally linked to the bridging tool. This suits anyone who wants to keep their existing spreadsheet rather than migrate to a full accounting package.

What to look for in a free option

• Unlimited submissions, not a free tier with a per-quarter cap that triggers a paywall in your fourth quarter.
• Multi-client support if you are an accountant or tax agent filing on behalf of others. Some free tiers cap client count.
• HMRC recognition status: confirm the product is on HMRC's compatible software list, or is in the recognition process.
• An honest paid-upgrade story: read the published pricing roadmap so “free today” does not become an unwelcome surprise next quarter.
• Quarterly updates and Final Declaration in the same product. Some tools only cover quarterly updates and require a second product for the Final Declaration.

Where Aligned fits

Aligned is bridging software for MTD ITSA. We take the spreadsheet you already use, map the columns to HMRC's submission categories with Smart Map, and file directly to HMRC's MTD API. Aligned is free to use during the soft landing period; see the pricing page for what is included.

If you are weighing this against keeping your spreadsheet, see whether you can still use spreadsheets for MTD ITSA. Or return to the Aligned homepage.