Quick Overview
- 1#1: Xero - Cloud-based accounting software that automates VAT calculations, digital record-keeping, and direct submissions to HMRC for full MTD compliance.
- 2#2: QuickBooks Online - Powerful online accounting platform with seamless MTD VAT reporting, error-checked returns, and instant HMRC submissions.
- 3#3: Sage Business Cloud Accounting - Robust UK-focused accounting solution offering comprehensive MTD VAT functionality, automation, and integration with HMRC.
- 4#4: FreeAgent - User-friendly cloud accounting for small businesses and freelancers with automated MTD VAT returns and HMRC connectivity.
- 5#5: KashFlow - Cloud accounting software providing detailed VAT management, quarterly reporting, and direct MTD submissions to HMRC.
- 6#6: VT Transaction+ - Professional accountancy software with advanced MTD VAT handling, compliance checks, and electronic filing capabilities.
- 7#7: Taxfiler - Specialized tax software for agents that simplifies MTD VAT return preparation and submission to HMRC.
- 8#8: GoSimpleTax - Straightforward online tool for creating, reviewing, and filing MTD VAT returns directly with HMRC.
- 9#9: Crunch - Integrated accounting service for SMEs with MTD-compliant VAT tools, automation, and expert support.
- 10#10: Clear Books - Online accounting platform supporting MTD VAT digital records, reporting, and submissions to HMRC.
Tools were selected based on strength of MTD functionality, user-friendliness, reliability in HMRC interactions, and overall value, ensuring a curated list that balances power with accessibility.
Comparison Table
Navigating Making Tax Digital (MTD) compliance for VAT can be streamlined with the right software; this comparison table breaks down key tools like Xero, QuickBooks Online, Sage Business Cloud Accounting, FreeAgent, and KashFlow, among others. It outlines critical features, usability, cost structures, and integration capabilities to help businesses identify the best fit for their unique needs.
| # | Tool | Category | Overall | Features | Ease of Use | Value |
|---|---|---|---|---|---|---|
| 1 | Xero Cloud-based accounting software that automates VAT calculations, digital record-keeping, and direct submissions to HMRC for full MTD compliance. | specialized | 9.6/10 | 9.8/10 | 9.5/10 | 9.2/10 |
| 2 | QuickBooks Online Powerful online accounting platform with seamless MTD VAT reporting, error-checked returns, and instant HMRC submissions. | specialized | 8.9/10 | 9.2/10 | 8.7/10 | 8.4/10 |
| 3 | Sage Business Cloud Accounting Robust UK-focused accounting solution offering comprehensive MTD VAT functionality, automation, and integration with HMRC. | enterprise | 8.7/10 | 9.2/10 | 8.4/10 | 8.1/10 |
| 4 | FreeAgent User-friendly cloud accounting for small businesses and freelancers with automated MTD VAT returns and HMRC connectivity. | specialized | 8.2/10 | 8.5/10 | 9.0/10 | 7.6/10 |
| 5 | KashFlow Cloud accounting software providing detailed VAT management, quarterly reporting, and direct MTD submissions to HMRC. | specialized | 8.4/10 | 8.6/10 | 9.0/10 | 8.1/10 |
| 6 | VT Transaction+ Professional accountancy software with advanced MTD VAT handling, compliance checks, and electronic filing capabilities. | enterprise | 7.6/10 | 8.0/10 | 7.2/10 | 7.5/10 |
| 7 | Taxfiler Specialized tax software for agents that simplifies MTD VAT return preparation and submission to HMRC. | specialized | 7.8/10 | 8.2/10 | 7.6/10 | 7.4/10 |
| 8 | GoSimpleTax Straightforward online tool for creating, reviewing, and filing MTD VAT returns directly with HMRC. | specialized | 7.8/10 | 7.5/10 | 8.2/10 | 7.6/10 |
| 9 | Crunch Integrated accounting service for SMEs with MTD-compliant VAT tools, automation, and expert support. | specialized | 7.8/10 | 7.9/10 | 8.4/10 | 7.2/10 |
| 10 | Clear Books Online accounting platform supporting MTD VAT digital records, reporting, and submissions to HMRC. | specialized | 7.6/10 | 7.4/10 | 8.2/10 | 7.5/10 |
Cloud-based accounting software that automates VAT calculations, digital record-keeping, and direct submissions to HMRC for full MTD compliance.
Powerful online accounting platform with seamless MTD VAT reporting, error-checked returns, and instant HMRC submissions.
Robust UK-focused accounting solution offering comprehensive MTD VAT functionality, automation, and integration with HMRC.
User-friendly cloud accounting for small businesses and freelancers with automated MTD VAT returns and HMRC connectivity.
Cloud accounting software providing detailed VAT management, quarterly reporting, and direct MTD submissions to HMRC.
Professional accountancy software with advanced MTD VAT handling, compliance checks, and electronic filing capabilities.
Specialized tax software for agents that simplifies MTD VAT return preparation and submission to HMRC.
Straightforward online tool for creating, reviewing, and filing MTD VAT returns directly with HMRC.
Integrated accounting service for SMEs with MTD-compliant VAT tools, automation, and expert support.
Online accounting platform supporting MTD VAT digital records, reporting, and submissions to HMRC.
Xero
specializedCloud-based accounting software that automates VAT calculations, digital record-keeping, and direct submissions to HMRC for full MTD compliance.
One-click VAT return submission to HMRC with built-in error detection and digital record-keeping for full MTD Phase 1 compliance
Xero is a leading cloud-based accounting software that provides full compliance with Making Tax Digital (MTD) for VAT, enabling direct submission of VAT returns to HMRC. It automates VAT calculations across sales, purchases, and bank transactions, with features like digital linking, error checking, and real-time reporting. Designed for UK businesses, it simplifies quarterly VAT compliance while integrating comprehensive accounting tools for invoicing, expenses, and reconciliations.
Pros
- Seamless direct VAT return submission to HMRC with automated bridging and validation
- Real-time bank feeds and AI-powered transaction categorization for accurate VAT extraction
- Comprehensive MTD dashboard with customizable reports and audit trails
Cons
- Higher pricing tiers required for advanced features like multi-currency VAT
- Initial setup and data migration can take time for complex businesses
- Limited offline access compared to desktop alternatives
Best For
UK small to medium-sized businesses seeking an all-in-one MTD VAT solution with scalable accounting capabilities.
Pricing
Starts at £14/month (Early plan, billed annually) up to £65/month (Ultimate plan); pricing scales with users, features, and payroll add-ons.
QuickBooks Online
specializedPowerful online accounting platform with seamless MTD VAT reporting, error-checked returns, and instant HMRC submissions.
One-click VAT return submission directly to HMRC with automatic Box population and error checking
QuickBooks Online is a cloud-based accounting platform from Intuit that fully supports Making Tax Digital (MTD) for VAT, enabling seamless digital record-keeping, VAT calculations, and direct submission of VAT returns to HMRC. It automates transaction categorization for Box 1-9 on VAT returns, maintains a digital link between transactions, and provides real-time VAT liability tracking via an intuitive dashboard. Beyond MTD compliance, it handles invoicing, expenses, bank reconciliations, and reporting for UK businesses.
Pros
- Direct VAT return submission to HMRC with full MTD compliance including digital linking
- Comprehensive VAT reporting and liability forecasting tools
- Seamless integration with bank feeds and 750+ apps for automated data import
Cons
- Higher pricing tiers required for advanced MTD features like multi-currency VAT
- Steeper learning curve for non-accountants despite intuitive interface
- Occasional sync issues with HMRC during peak filing periods
Best For
Small to medium-sized UK businesses seeking an all-in-one accounting solution with robust MTD VAT compliance and scalability.
Pricing
Starts at £12/month (Simple Start) up to £110/month (Advanced); MTD VAT features available from Essentials plan (£20/month).
Sage Business Cloud Accounting
enterpriseRobust UK-focused accounting solution offering comprehensive MTD VAT functionality, automation, and integration with HMRC.
Automated VAT return bridging to HMRC with built-in error detection and digital signing
Sage Business Cloud Accounting is a comprehensive cloud-based platform designed for small to medium-sized businesses, offering end-to-end accounting tools including invoicing, expense tracking, and financial reporting. It fully supports Making Tax Digital (MTD) for VAT compliance, enabling seamless digital submission of VAT returns directly to HMRC. The software automates VAT calculations, reconciliations, and error checks to simplify quarterly reporting requirements.
Pros
- Robust MTD VAT compliance with direct HMRC submissions and automated calculations
- Excellent integration with bank feeds and other Sage ecosystem tools
- Real-time reporting and mobile app for on-the-go access
Cons
- Higher pricing tiers can be expensive for very small businesses
- Steeper learning curve for advanced customization features
- Customer support response times can vary
Best For
Small to medium UK businesses seeking reliable, scalable MTD VAT-compliant accounting with strong automation.
Pricing
Starts at £18/month for Standard plan (up to 3 users), £30/month for Plus; annual discounts available.
FreeAgent
specializedUser-friendly cloud accounting for small businesses and freelancers with automated MTD VAT returns and HMRC connectivity.
Seamless bank account integrations that auto-categorize transactions for precise MTD VAT liability calculations
FreeAgent is a UK-focused cloud accounting software tailored for freelancers, contractors, and small businesses, providing full Making Tax Digital (MTD) compliance for VAT through automated record-keeping, VAT return calculations, and direct submissions to HMRC. It streamlines VAT processes by categorizing transactions, handling quarterly reporting, and maintaining a digital audit trail. Beyond VAT, it offers invoicing, expense tracking, payroll, and bank reconciliations in an intuitive dashboard.
Pros
- Intuitive interface with mobile app for easy MTD VAT management
- Automatic bank feeds and transaction categorization for accurate VAT records
- Direct HMRC API integration for error-free VAT submissions
Cons
- Higher pricing tiers may not suit micro-businesses
- Limited customization in advanced VAT reporting
- Customer support primarily email-based without live chat
Best For
UK freelancers, contractors, and small businesses seeking user-friendly MTD VAT compliance with comprehensive accounting tools.
Pricing
Starts at £19/month (billed annually) for basic accounting, up to £125/month for full features including payroll; free for eligible NatWest/RBS business customers.
KashFlow
specializedCloud accounting software providing detailed VAT management, quarterly reporting, and direct MTD submissions to HMRC.
One-click automated VAT return submission directly to HMRC
KashFlow is a cloud-based accounting software tailored for UK small businesses, providing full Making Tax Digital (MTD) compliance for VAT through direct integration with HMRC's API. It enables digital record-keeping, automated VAT calculations, quarterly return submissions, and seamless bank reconciliations to simplify compliance. The platform also handles invoicing, expenses, and basic reporting, making it a comprehensive tool for VAT-focused accounting.
Pros
- Fully MTD VAT compliant with direct HMRC submissions
- Intuitive interface ideal for non-accountants
- UK-based support team with quick response times
Cons
- Limited advanced analytics and custom reporting
- Fewer third-party integrations than top competitors
- Higher tiers needed for multi-user access
Best For
Small UK businesses needing straightforward MTD VAT compliance integrated with everyday accounting tasks.
Pricing
Starts at £20/month (Solo plan, annual billing) up to £52/month (Advanced plan); additional fees for payroll and extras.
VT Transaction+
enterpriseProfessional accountancy software with advanced MTD VAT handling, compliance checks, and electronic filing capabilities.
Multi-client vault system for secure, centralized VAT record-keeping and submissions
VT Transaction+ from VT Software is a robust desktop-based solution tailored for Making Tax Digital (MTD) VAT compliance in the UK. It enables users to digitally record sales invoices, purchase invoices, and bank transactions, perform reconciliations, and generate and submit VAT returns directly to HMRC via API. Designed primarily for accountants and small to medium-sized businesses, it supports multi-client management and bridges to cloud platforms like Xero and QuickBooks.
Pros
- Fully MTD-compliant with direct HMRC submissions
- Strong multi-client handling for accountancy practices
- Reliable bank reconciliation and transaction bridging
Cons
- Dated user interface compared to modern cloud rivals
- Steeper learning curve for non-accountants
- Limited advanced analytics and reporting options
Best For
Small to medium accountancy practices needing efficient MTD VAT processing for multiple clients.
Pricing
Subscription starts at £29/month for single-user, scaling to £99+/month for multi-user/client plans; one-off setup fees may apply.
Taxfiler
specializedSpecialized tax software for agents that simplifies MTD VAT return preparation and submission to HMRC.
Direct HMRC Gateway integration for real-time VAT return validation and submission without bridging software.
Taxfiler is a cloud-based platform tailored for UK accountants and tax agents, providing full Making Tax Digital (MTD) compliance for VAT returns through direct HMRC submissions. It automates VAT return preparation, error checking, and digital record-keeping, while integrating with popular accounting tools like Xero and QuickBooks. Beyond VAT, it supports corporation tax, self-assessment, and CIS, making it a comprehensive solution for practices handling multiple clients.
Pros
- Fully MTD VAT compliant with seamless HMRC API integration
- Strong automation for VAT calculations and error detection
- Integrates well with Xero, QuickBooks, and other accounting software
- Reliable customer support tailored to accountants
Cons
- Geared more towards professional practices than sole traders or small businesses
- Pricing can become expensive with per-client or high-volume usage
- Interface feels dated compared to newer competitors
- Limited standalone mobile app functionality
Best For
Accounting practices and tax agents managing VAT returns for multiple clients under MTD requirements.
Pricing
Starts at £19 + VAT per month for basic single-user access, with tiered plans up to £99/month; additional per-return or per-client fees apply for larger practices.
GoSimpleTax
specializedStraightforward online tool for creating, reviewing, and filing MTD VAT returns directly with HMRC.
Automated OCR invoice scanning and bank feed reconciliation for hands-off VAT ledger maintenance
GoSimpleTax is a cloud-based accounting platform tailored for UK businesses to meet Making Tax Digital (MTD) VAT requirements, enabling seamless digital submission of VAT returns to HMRC. It automates bank reconciliation, invoice capture via OCR scanning, and transaction categorization to simplify quarterly VAT compliance. The software also integrates self-assessment and basic payroll tools, making it a versatile option for small businesses managing multiple tax obligations.
Pros
- Intuitive dashboard and mobile app for easy access
- Strong HMRC integration with error-checking for submissions
- Affordable entry-level pricing with unlimited transactions
Cons
- Limited advanced reporting and analytics compared to enterprise tools
- Occasional delays in bank feed synchronization
- Fewer third-party integrations than top competitors
Best For
Small businesses and sole traders needing straightforward, low-cost MTD VAT compliance without advanced accounting needs.
Pricing
Starts at £19/month for VAT-only plans (pay-as-you-go options available), scaling to £49/month for full features including payroll.
Crunch
specializedIntegrated accounting service for SMEs with MTD-compliant VAT tools, automation, and expert support.
Hybrid model combining self-service MTD software with on-demand professional accountants for VAT returns.
Crunch (crunch.co.uk) is a cloud-based accounting platform designed for UK freelancers, contractors, and small businesses, offering full Making Tax Digital (MTD) compliance for VAT. It automates VAT return preparation, expense tracking, invoicing, and direct submissions to HMRC via API. Users can opt for DIY software use or bundled professional accountancy services for hands-off compliance.
Pros
- Straightforward MTD VAT submissions and HMRC integration
- Intuitive dashboard for expense and invoice management
- Optional full accountancy service for non-experts
Cons
- Pricing escalates quickly with added services
- Limited advanced reporting compared to enterprise tools
- Less flexibility for complex VAT scenarios
Best For
Freelancers and sole traders who want simple MTD VAT handling with the option for professional support.
Pricing
Basic software from £29.50/month (VAT included); full accounting packages from £69.50/month.
Clear Books
specializedOnline accounting platform supporting MTD VAT digital records, reporting, and submissions to HMRC.
Project profitability tracking with time and expense allocation directly integrated into MTD-compliant records
Clear Books is a cloud-based accounting software tailored for UK small businesses, providing tools for invoicing, expense management, bank reconciliation, and financial reporting. It is fully compliant with Making Tax Digital (MTD) for VAT, enabling digital record-keeping and direct quarterly VAT submissions to HMRC via API. The platform also supports multi-currency transactions and project tracking, streamlining compliance and operations for service-oriented firms.
Pros
- Seamless MTD VAT integration with direct HMRC submissions
- Intuitive interface suitable for non-accountants
- Unlimited users on all plans for team collaboration
Cons
- Limited advanced reporting and analytics compared to competitors
- No built-in payroll or inventory management
- Some features locked behind higher pricing tiers
Best For
Small UK service-based businesses seeking simple, compliant MTD VAT handling without needing complex enterprise features.
Pricing
Starts at £10/month (Starter plan) up to £55/month (Premium), billed annually; excludes VAT.
Conclusion
The top three tools lead in Making Tax Digital VAT compliance, with Xero the standout— excelling in automated calculations, record-keeping, and HMRC submissions. QuickBooks Online follows with robust reporting and error checks, while Sage Business Cloud Accounting impresses with UK-focused integration and comprehensive features, suiting varied needs. These platforms deliver reliable, efficient solutions for modern VAT management.
Dive into Xero to experience seamless, automated VAT processes and simplify your MTD compliance— a top choice that balances power and ease for any business.
Tools Reviewed
All tools were independently evaluated for this comparison