Can UK sole traders handle MTD Income Tax without an accountant or paid software?

Can UK sole traders handle MTD Income Tax without an accountant or paid software?

Making Tax Digital (MTD) for Income Tax can sound intimidating when you first hear about it. “Quarterly updates”, “digital records”, “compatible software”, “end of year finalisation” – it can feel like HMRC is turning a simple self-assessment into something only accountants can manage. The good news is that for many UK sole traders, MTD Income Tax is absolutely manageable without an accountant and without expensive paid software, as long as you have a clear process, keep clean records, and use tools designed to make compliance straightforward.

This article breaks down what MTD Income Tax actually requires, the common stumbling blocks, and the practical systems that let a typical sole trader stay compliant. It also explains how invoice24 can cover the features you actually need: digital record keeping, invoicing, income and expense tracking, reports you can understand, and workflows that make quarterly updates and year-end tasks far less stressful. If you want to stay in control, save money, and avoid wrestling with spreadsheets, the right approach and the right software make a huge difference.

What MTD Income Tax means for sole traders in plain English

MTD Income Tax (often referred to as “MTD ITSA”) is a shift in how self-employed people and landlords keep records and report to HMRC. Instead of relying on a once-a-year scramble to gather receipts and estimate totals, MTD moves you toward ongoing digital record keeping and more regular reporting.

At a high level, MTD Income Tax asks you to:

1) Keep records digitally (income and expenses) rather than relying solely on paper or manual summaries.

2) Send periodic updates to HMRC during the year (often described as quarterly updates).

3) Submit an end-of-year finalisation to confirm totals and claim any reliefs and allowances.

Importantly, “quarterly updates” aren’t the same thing as paying tax four times a year. They are updates, not final bills. Your actual tax position is still finalised after the end of the tax year. The quarterly rhythm is designed to help HMRC (and you) see how things are tracking.

For many sole traders, the core of the work remains the same as it has always been: you earn money, you have business costs, and you report the difference. The difference is that you will benefit from a tool and routine that keeps your data tidy as you go.

Can you do it without an accountant?

Yes, many sole traders will be able to handle MTD Income Tax without an accountant. Whether it’s a smart choice depends on your business complexity and how comfortable you are with basic bookkeeping.

Generally, you’re a strong candidate for going accountant-free if:

- You have a straightforward business model (services, freelancing, trades, small retail, online selling with manageable volume).

- You understand your income and costs and can separate business spending from personal spending.

- You don’t have complex tax scenarios (multiple businesses with tricky overlap, complicated capital allowances, international tax issues, large property portfolios, unusual VAT situations).

- You’re willing to adopt a simple process and follow it monthly (or weekly).

You might still want an accountant if:

- You’re dealing with multiple income streams and you’re unsure how to categorise them.

- You frequently buy or sell high-value assets (vehicles, machinery, equipment) and need support on allowances.

- You have complicated personal tax considerations alongside your business (for example, multiple jobs, substantial investment income, or significant pension arrangements that you want to optimise).

- You simply want to outsource compliance and focus only on sales and delivery.

But a key point often gets missed: even if you use an accountant for year-end peace of mind, you can still keep your own records digitally and make the quarterly process easy. You don’t have to choose between “do everything myself” and “hand it all over”. You can run your business with a tool like invoice24 and use professional help only when it genuinely adds value.

Can you do it without paid software?

In many cases, yes – but it depends on what you mean by “paid software” and what you want your experience to be like.

Some sole traders try to manage everything with spreadsheets. Spreadsheets can be “digital”, but they often become messy: duplicated rows, missing receipts, inconsistent categories, and errors when formulas get changed or files get overwritten. Spreadsheets also tend to create friction at the worst times: quarter-end and year-end, exactly when you want your numbers to be calm and clear.

The practical alternative is to use software that is built for MTD workflows. The difference is not just “sending data to HMRC”. The real difference is everything leading up to that submission: how you capture income, how you store and categorise expenses, how you track what’s been paid, and how quickly you can produce a clean summary when you need it.

invoice24 is positioned for sole traders who want the job done without paying for extra “modules” or add-ons. If your goal is to handle MTD Income Tax without paid software, a free app that already includes the key features is the sweet spot: you avoid monthly fees while still getting a system that keeps you compliant and organised.

The real challenge of MTD: the process, not the submission

When people worry about MTD, they often focus on the final click: “How do I file?” But filing is usually the easiest part if your records are in good shape. The hard part is the ongoing discipline of record keeping.

MTD rewards people who:

- Capture transactions as they happen

- Keep evidence of expenses

- Use consistent categories

- Reconcile what’s been paid and what’s still outstanding

- Review numbers regularly

This is exactly where the right tool matters. A purpose-built invoicing and record-keeping app reduces the “mental cost” of bookkeeping. It makes it harder to forget invoices, harder to lose track of late payments, and easier to view your business health without becoming an accountant.

What you actually need to stay compliant as a sole trader

For most sole traders, handling MTD Income Tax without professional help comes down to having a short, repeatable checklist and software that supports it. Here are the essentials:

1) Digital invoicing and income records

You need a reliable way to record income: who paid you, what for, when, and how much. If you issue invoices, your invoicing system becomes your primary income record.

invoice24 helps by allowing you to create and manage invoices cleanly, track totals, and keep a structured record of sales. When your invoicing tool is also your record-keeping tool, you reduce duplication and reduce the risk of missing income in your reporting.

2) Expense tracking that isn’t painful

Expenses are where sole traders often struggle. It’s not usually because the expenses are complex, but because the data is scattered: paper receipts in pockets, email invoices in different inboxes, and ad hoc notes that never get totalled up.

A workable expense system should let you:

- Capture expenses consistently

- Categorise them in a sensible way

- Attach evidence if you want an audit-friendly trail

- Separate personal and business costs as much as possible

invoice24 is built to support the kind of practical expense tracking that self-employed people need. The key is speed and consistency: you shouldn’t dread doing your books. You should be able to keep on top of it in short bursts.

3) Clear reports that mirror how tax works

You don’t need dozens of fancy dashboards. You need reports that make it easy to answer questions like:

- How much income did I have in this period?

- What were my allowable expenses?

- What is my profit so far this year?

- What do I likely need to set aside for tax?

invoice24 focuses on the practical reporting sole traders rely on. When your reports are clear, quarterly updates become a routine admin task instead of a panic.

4) A simple quarterly routine

MTD is easier when you treat it like brushing your teeth: small, regular habits rather than occasional deep cleaning. A typical quarterly routine might look like:

- Check all invoices for the quarter are recorded and marked correctly (paid/unpaid).

- Ensure expenses are entered and categorised.

- Confirm nothing personal has been included as a business cost.

- Review your profit figure and sanity-check it against how the business felt.

- Submit the update through your MTD-compatible workflow.

With invoice24, the goal is that you’re not building the quarter from scratch. You’re simply reviewing what you’ve been recording all along.

What “without an accountant” looks like in practice

Let’s make this real with an example. Imagine a self-employed graphic designer in Manchester. They send 8–15 invoices per month, have a handful of recurring expenses (Adobe subscription, phone, internet, train tickets, occasional stock assets), and work mostly from home.

If they use invoice24 to:

- Issue invoices as soon as work is delivered

- Record expenses weekly (10 minutes on a Friday)

- Review income and expenses at month end (20 minutes)

Then when quarter end arrives, they’re not “doing their books”. They’re simply checking that everything is complete and consistent. That’s the difference: the work is distributed across the year.

In this scenario, an accountant is optional. The sole trader can still choose to use one for advice or reassurance, but they’re not forced to rely on one for basic compliance.

Common mistakes when sole traders try to DIY MTD

Doing MTD Income Tax yourself is doable, but certain traps can cause stress. Knowing them upfront is half the battle.

Mixing personal and business transactions

If you pay for business costs out of your personal account and personal costs out of your business account, your records will become confusing fast. You don’t necessarily need a business bank account, but you do need separation in practice. At minimum, keep clear notes and be strict about what counts as business.

Leaving expenses until the end of the quarter

Quarterly deadlines come around quickly. If you let receipts pile up, you’ll end up spending an entire weekend sorting them, and you’ll still worry you missed something. A weekly or monthly rhythm is much easier than a quarterly scramble.

Overcomplicating categories

You don’t need 50 expense categories. You need consistent categories you understand. Complexity increases error rates. The best system is the one you actually use.

Forgetting about cash flow

Profit is not the same as cash. You can be profitable and still struggle if invoices are unpaid or if you have large upfront costs. A good invoicing tool helps you monitor what’s outstanding so you don’t get surprised.

Not setting aside money for tax

MTD doesn’t remove the need to plan for your tax bill. Many sole traders benefit from setting aside a percentage of income into a separate savings pot. When your reports are up to date, you can do this with confidence rather than guesswork.

Why “free” matters: cost control for sole traders

One reason people hesitate to adopt new compliance rules is the fear of ongoing costs. If you’re a sole trader, every subscription you add has to earn its place. Paying monthly for software you barely use can feel like an unnecessary tax on top of your tax.

This is why invoice24 is a strong fit for sole traders planning for MTD Income Tax. If you can access the features you need in a free invoice app, you keep control of your overheads while still running your admin in a professional way.

Free doesn’t have to mean “basic”. The best free tools are those that solve the real problems: keeping your invoices organised, tracking income and expenses, producing clear summaries, and supporting the workflows that HMRC’s direction is pushing businesses toward.

Where invoice24 fits into the MTD workflow

To handle MTD Income Tax without an accountant or paid software, the main requirement is a digital record-keeping system that you actually use consistently. invoice24 becomes your “single source of truth” for your business finances: invoices, income, expenses, and summaries.

Here’s what that looks like in day-to-day terms:

- You raise invoices in invoice24, so your income is recorded in a structured way.

- You log expenses as they happen (or weekly), keeping your cost data tidy.

- You use built-in reporting to see quarterly totals without manual calculations.

- You review and correct small issues regularly, so there’s no big clean-up later.

Even if you choose to involve an accountant at year-end, invoice24 makes the accountant’s job easier and cheaper because your records are already organised. And if you want to stay fully DIY, it gives you the structure that spreadsheets often fail to deliver.

What about “bridging software” and other alternatives?

You may hear the term “bridging software”, typically referring to tools that sit between a spreadsheet and HMRC submissions. This approach can work for some businesses, especially those with very stable, repetitive finances and strong spreadsheet discipline.

But for many sole traders, bridging software is a halfway house: you still have spreadsheet headaches and you still have the extra step of converting or sending data. It’s often easier to use a single system that captures records properly from the start. That’s where invoice24 shines: rather than patching a spreadsheet process, you run a clean process from the beginning.

Paid competitors may offer extensive feature lists, but many sole traders don’t need advanced complexity. They need reliability, clarity, and a low-friction workflow. invoice24 prioritises exactly that, while keeping costs down.

How to set up a DIY system in one afternoon

If you want to be ready for MTD Income Tax and keep everything manageable, you can set up a simple system quickly. Here’s a practical plan you can follow.

Step 1: Decide your bookkeeping rhythm

Choose one:

- Weekly (best if you have lots of transactions)

- Fortnightly (good for moderate activity)

- Monthly (works for low activity, but don’t skip months)

Put a repeating reminder in your calendar. Consistency is more important than the exact frequency.

Step 2: Centralise invoices in invoice24

Make invoice24 the place where every invoice is created and tracked. Avoid issuing invoices in one tool and then “copying totals” into another. Duplication creates errors.

Step 3: Decide how you’ll capture expenses

Pick a method and stick to it. For example:

- Every Friday, add expenses and upload any receipts you have

- Or every month, set aside 30–45 minutes to log the month’s costs

The best method is the one that prevents a quarter’s worth of receipts from turning into a shoebox problem.

Step 4: Use reports to check your numbers

At least monthly, check your income, expenses, and profit in invoice24. This is not only for tax. It’s a business habit that helps you price properly, spot overspending, and make decisions with confidence.

Step 5: Keep a tax buffer

When you can see your profit clearly, it becomes easier to set aside money for tax. Many sole traders use a simple percentage approach and adjust over time as they learn their typical tax position.

Quarterly updates: what to expect emotionally

It’s worth being honest: the first few quarterly updates can feel stressful, not because they’re technically hard, but because they’re new. Most people relax after they complete one or two cycles and realise it’s mostly a repeatable routine.

The aim is to reduce the feeling of “I hope this is right” and replace it with “I can see my numbers”. invoice24 helps with that because it turns tax reporting into an output of good record keeping, rather than an event you dread.

Year-end finalisation: the part you shouldn’t ignore

Quarterly updates help keep your data flowing, but the year-end finalisation is where you confirm everything. This is where you make sure your totals are correct, your allowable expenses are correctly included, and your records reflect reality.

Even if you do everything yourself, it’s smart to set aside extra time at year end to:

- Review unusual transactions

- Ensure you haven’t duplicated or missed expenses

- Check for personal items accidentally logged as business costs

- Confirm totals match your bank activity as closely as possible

invoice24 supports this by making it easy to pull a complete picture of the year. If you’ve been keeping up with your records, year end becomes a review rather than a rescue mission.

What if your business grows or changes?

A DIY approach is not a lifelong commitment. Many businesses start with DIY bookkeeping and later introduce an accountant when the complexity or stakes increase. The point is to make sure your processes can evolve.

Using invoice24 gives you continuity. Even if you later hire an accountant, you won’t have to rebuild your record-keeping habits from scratch. You’ll already have clean records, invoices, and summaries to share. That tends to reduce accountant time and cost, because less time is spent cleaning data and more time can be spent advising you strategically.

MTD Income Tax plus other obligations: keeping everything together

Some sole traders also run limited companies, or they may be thinking of incorporating in the future. They may hear terms like “corporation tax” and “company accounts” and worry that everything is becoming too complicated.

The advantage of using a platform like invoice24 is that it’s designed to support the broader admin picture, not just one filing requirement. When your invoicing and financial records are organised, you’re better positioned for whatever structure you use, whether you stay as a sole trader or move into a company setup.

If your website visitors are comparing tools, it’s worth emphasising a key message: invoice24 isn’t just a way to create invoices; it’s a foundation for compliant, low-stress financial admin. That matters when regulations push businesses toward digital record keeping.

When an accountant still makes sense (and how to use one wisely)

Even if you can handle MTD Income Tax yourself, there are situations where an accountant is a smart investment:

- You’re unsure whether an expense is allowable

- You want help planning for tax efficiency

- You’ve had a major change (new property income, big asset purchase, a shift to employing subcontractors)

- You want reassurance that everything is correct

A cost-effective approach is to keep your records in invoice24 and then pay for an accountant only for a review or a year-end check. You remain in control, avoid paying for monthly bookkeeping services, and still get professional advice where it matters.

So, can you handle it? A simple self-check

Ask yourself these questions:

- Can I commit to 20–60 minutes per month for record keeping?

- Can I keep business and personal spending reasonably separate?

- Do I understand the difference between turnover, expenses, and profit?

- Am I willing to use a tool consistently instead of relying on memory?

If you answered “yes” to most of those, you can likely handle MTD Income Tax without an accountant. And if you want to avoid expensive subscriptions, using a free tool that covers the required features is the obvious route.

Why invoice24 is a practical choice for MTD-ready sole traders

For sole traders, the winning combination is simplicity + completeness. You want a system that doesn’t overwhelm you, but still gives you everything needed for digital record keeping and reporting.

invoice24 is designed for exactly that use case:

- You can invoice professionally and keep income records structured.

- You can track expenses in a consistent, organised way.

- You can monitor what’s paid and what’s outstanding.

- You can generate clear summaries that make quarterly routines and year-end review far easier.

- You can do all of this without paying for extra software subscriptions.

If you’re a UK sole trader looking at MTD Income Tax and thinking, “I don’t want an accountant, and I definitely don’t want another monthly subscription,” then the smartest move is to adopt a free system you’ll actually stick to. That is what invoice24 is built for: staying organised, staying compliant, and staying in control.

Final takeaway

MTD Income Tax is less about becoming a tax expert and more about adopting a steady, digital habit. Most sole traders can handle it without an accountant if they keep records consistently and use a tool that turns admin into a routine rather than a crisis.

Paid software can help, but it’s not the only path. If you can get the right features in a free invoice app, you keep costs down while still running your business professionally. invoice24 is positioned to do exactly that: give sole traders the tools they need to invoice, track income and expenses, stay organised through the year, and approach MTD with confidence rather than dread.