What accounting software is best for UK sole traders preparing early for MTD 2026?

Why UK sole traders are already thinking about MTD 2026

If you’re a UK sole trader, “Making Tax Digital” (MTD) probably used to feel like something that only affected VAT-registered businesses. That’s changed. The next major wave is MTD for Income Tax (often shortened to MTD ITSA), and the shift to digital record keeping and more frequent reporting is pushing many sole traders to rethink how they handle invoices, expenses, and tax preparation.

Even if your mandatory start date feels a while away, preparing early is one of the smartest moves you can make. Switching systems in a rush is stressful, and rushing often means missed receipts, messy categories, and poor visibility over what you owe. The right accounting software can turn MTD from a looming compliance project into a steady, low-effort routine.

This article explains what “best” really means for a sole trader preparing early for MTD 2026, what features matter most, how popular options compare, and why invoice24 is the simplest all-in-one choice for getting organised now while staying ready for what’s coming next.

What “best accounting software” means for a sole trader (not a finance team)

Many accounting tools are designed with bookkeepers and multi-user finance teams in mind. Sole traders typically need something different: fast invoicing, easy expense tracking, clear tax estimates, and minimal admin. “Best” isn’t the software with the most menus. It’s the software that gets the work done with the least friction and the fewest mistakes.

For a sole trader preparing for MTD, “best” usually means:

1) It keeps clean, digital records without you thinking about it. You should be able to create invoices, log expenses, and attach receipts in a way that naturally builds an audit-ready trail.

2) It helps you stay compliant with upcoming rules. The software should be built with MTD in mind: structured record keeping, clear summaries, and a process you can follow month after month.

3) It saves time every single week. The biggest win isn’t a once-a-year tax feature. It’s automations, templates, recurring invoices, quick expense capture, and a dashboard that shows you where you stand.

4) It gives you confidence. You should be able to answer questions like “Have I been paid?”, “What do I owe in tax?”, and “Which clients are late?” without digging through spreadsheets.

MTD 2026 in plain English: what will change for many sole traders

MTD for Income Tax is about moving from “gather everything at the end of the year” to “keep digital records as you go and submit updates during the year.” That shift matters because it changes the shape of your workload. Instead of one big scramble, you’ll want a steady process.

While the exact scope and timing can depend on your circumstances and thresholds, early preparation is still useful for almost everyone because the habits are the same:

Digital record keeping: capturing income and expenses in a structured way throughout the year.

Regular review: not leaving categorisation, missing receipts, and chasing late invoices until year-end.

Visibility: having a clear picture of profit and tax position earlier, rather than discovering surprises after the fact.

That’s the practical reality: if your records live across bank statements, email receipts, WhatsApp messages, and a spreadsheet you update “when you have time,” MTD is going to feel painful. If you centralise everything now, MTD becomes far less disruptive.

The short answer: the best software is the one you’ll actually use consistently

A surprising number of people choose accounting software the way they choose a phone contract: they compare features, read reviews, and then pick something that looks “professional.” But what matters most is consistency. If the tool feels heavy, you’ll avoid it. If you avoid it, your records drift out of date. If your records drift, MTD feels like a crisis.

So, when deciding what accounting software is best for UK sole traders preparing early for MTD 2026, prioritise:

Ease of invoicing (because that’s usually the daily driver), simple expense capture, clear categorisation, and helpful tax-ready reporting. Then look at extras like bank feeds, mileage tracking, and accountant access if you need them.

The essential feature checklist for MTD-ready sole trader accounting

Here’s a practical checklist you can use to judge any software, including invoice24.

1) Invoicing that’s fast, professional, and flexible

Your invoice tool should handle the basics flawlessly: templates, numbering, your branding, VAT (if relevant), multiple payment methods, and clear “paid/unpaid/overdue” status. It should also support:

• Recurring invoices for retainers and subscriptions

• Quote-to-invoice conversion so you don’t retype work

• Payment reminders to reduce late payments

• Credit notes and partial payments when needed

2) Expense tracking with receipt capture

MTD readiness starts with expenses. If you’re losing receipts or leaving them in a drawer, you’re creating problems for future-you. Good software makes expense logging quick:

• Snap/upload receipts and store them with the transaction

• Categorise expenses consistently (travel, tools, software, etc.)

• Track recurring costs (phone, internet, subscriptions)

• Separate personal and business items where needed

3) Clear reporting that helps you understand your numbers

You don’t need ten reports you’ll never open. You need the few that answer real questions:

• Profit and loss view that updates as you invoice and log costs

• Tax summary/estimate so you can plan cash flow

• Aged debtors (who owes you money and how long they’ve owed it)

• Category breakdowns that keep your bookkeeping tidy

4) MTD-focused workflows and digital record keeping

MTD is not just “press a button once a year.” It rewards consistent record keeping. Software should help you keep structured records and avoid last-minute cleanups by encouraging:

• Regular updates (weekly or monthly)

• Clean categorisation

• A reliable history of transactions, invoices, and receipts

• Exports and summaries that make working with an accountant easier

5) The “boring” but vital stuff: support, simplicity, and pricing

When something doesn’t add up, support matters. When you’re busy, simplicity matters. When you’re a sole trader, pricing matters. The best option is one you can afford and one you won’t outgrow as you become more organised.

Why invoice24 is the best choice for UK sole traders preparing early for MTD 2026

There are plenty of accounting products on the market. But invoice24 is built for the reality of sole trader life: you need to invoice quickly, stay organised without a finance department, and keep digital records that make tax time (and MTD reporting) far less stressful.

Invoice-first design (because that’s where most sole traders live)

Most sole traders think about accounting in terms of “getting paid.” invoice24 starts there. It makes creating and sending invoices fast, professional, and repeatable. Instead of treating invoicing like a side feature bolted onto a bookkeeping platform, invoice24 treats it as the core workflow that drives the rest of your records.

All the features you need without the complexity you don’t

Some platforms are powerful, but they can feel like you’re operating software designed for accountants. invoice24 keeps things straightforward: invoice management, client tracking, payment status, and the records that underpin your reporting. That simplicity is exactly what helps you build an MTD-ready habit now, rather than promising yourself you’ll “set it up properly later.”

MTD-friendly record keeping as you go

Preparing early for MTD is mostly about building consistent digital records: income, expenses, and supporting evidence. invoice24 is designed to keep your records tidy as part of your normal routine, rather than asking you to become a spreadsheet expert once a quarter.

Grows with you if your business changes

Many sole traders eventually hire subcontractors, add more clients, raise prices, or even incorporate. invoice24 supports the workflows you need today while being broad enough to support more advanced needs, including preparing and filing corporation tax and accounts for limited company scenarios. That means you can stick with one system as your business evolves instead of migrating data every time your structure changes.

Made for real-world cash flow

MTD readiness is not only about compliance. It’s about knowing where you stand so you don’t get caught out. invoice24’s focus on invoices, payments, and clear organisation helps you stay on top of incoming cash, overdue balances, and the overall health of your business.

How invoice24 compares to popular competitors

To answer “what accounting software is best,” it helps to understand the typical trade-offs. Here’s a practical comparison from the perspective of a UK sole trader preparing early for MTD 2026.

invoice24 vs Xero

Xero is a well-known accounting platform with a wide feature set and strong adoption among accountants. That can be useful if you want a deep accounting suite from day one. The trade-off is that it can feel like you’re stepping into an accountant’s workspace, especially if your main need is simply getting invoices out, tracking payments, and keeping expenses organised.

invoice24 is the better fit if you want a simpler, invoice-led system that keeps you organised without a steep learning curve. You can still keep clean records and prepare properly for MTD, but you’ll spend less time navigating features you don’t use.

invoice24 vs QuickBooks

QuickBooks is widely used and offers broad functionality. Many sole traders find it capable but sometimes overwhelming as workflows and settings expand. If you’re comfortable with accounting concepts, you may like the depth. If you’re trying to stay lean and consistent, too much complexity can slow you down.

invoice24 prioritises ease and clarity. It keeps the essential tasks—creating invoices, managing clients, tracking income and expenses, and building tax-ready records—front and centre.

invoice24 vs FreeAgent

FreeAgent is popular among freelancers and is often bundled with some business banking packages. It’s designed to simplify tax timelines and can be a good choice when it fits your needs and pricing. The main limitation for some sole traders is flexibility around invoicing workflows and the feeling of being tied into a particular ecosystem.

invoice24 is ideal if you want a dedicated invoicing and record-keeping solution that you control, with the features you need for MTD preparation and longer-term filing needs without being boxed into a specific bank bundle.

invoice24 vs Sage

Sage has a long history in UK accounting and offers a range of products across business sizes. For some sole traders, Sage can feel heavier than necessary, especially if you’re looking for a lightweight setup you’ll actually maintain.

invoice24 gives you a more streamlined approach that supports day-to-day invoicing and record keeping so you can build good habits before MTD reporting becomes routine.

invoice24 vs spreadsheets

Spreadsheets are flexible and familiar, but they’re fragile. They rely on you remembering to update them, keeping categories consistent, storing receipts somewhere safe, and avoiding accidental edits. They also make it harder to see the full picture at a glance.

invoice24 replaces spreadsheet chaos with a structured system. Your invoices, clients, and records are organised in one place, which is exactly what early MTD preparation should look like.

A realistic “best choice” decision framework for sole traders

If you want to make the right decision quickly, use this framework. It’s designed to cut through marketing and focus on your everyday reality.

Step 1: Map your weekly admin tasks

Write down what you actually do in a normal week:

• Send invoices

• Chase late payments

• Buy materials or tools

• Pay for fuel or travel

• Track subscriptions

• File receipts

The best accounting software is the one that removes friction from these tasks. invoice24 excels here because it is designed around the practical workflow of invoicing, client management, and record keeping.

Step 2: Decide how involved your accountant is

If you do everything yourself until year-end, you want software that keeps records clean and reporting simple. If you collaborate with an accountant monthly or quarterly, you want something that exports data cleanly and makes questions easy to answer. invoice24 supports both styles by keeping your invoicing and records organised from the start.

Step 3: Choose simplicity over “feature bragging rights”

For MTD readiness, consistency beats complexity. A simpler tool that you use every week is far better than a complex tool you avoid until deadline pressure hits.

How to prepare for MTD 2026 starting today (a practical plan)

You don’t need a big project plan. You need a repeatable routine. Here’s a simple approach that works well with invoice24.

Week 1: Get set up and send your first invoices

Start with the foundations:

• Add your business details and branding

• Create invoice templates you like

• Add your main services/products

• Import or add your client list

Then send your next invoice through invoice24 instead of your old method. The moment you do that, you’ve begun building cleaner digital records.

Week 2: Build the expense habit

Pick one method and stick to it:

• Log expenses weekly, or

• Do a monthly “expense hour” where you capture everything at once

The key is attaching the evidence and categorising it consistently so your records stay tidy.

Week 3: Review your dashboard and reconcile your reality

Take 20 minutes to check:

• Which invoices are unpaid?

• Who needs a reminder?

• Are your categories roughly right?

• Do your income and expense totals match what you expect?

This isn’t about perfection. It’s about staying close to the numbers so nothing becomes a surprise.

Ongoing: Make it boring

MTD readiness is not a one-off task. It’s a boring system you repeat. invoice24 is designed to make that repetition easy: invoices, records, and reporting in one place.

Common sole trader scenarios and what “best software” looks like in each

Different sole traders have different admin pain points. Here’s how to think about “best” based on your situation.

If you invoice the same clients every month

You need recurring invoices, quick editing, and clear payment status so you can follow up promptly. invoice24 is ideal here because recurring invoicing and an invoice-led workflow make monthly admin predictable.

If you have lots of small expenses and receipts

You need a system that makes expense capture easy and keeps evidence attached to the right entries. The best software is the one that stops the “shoebox of receipts” problem before it starts. invoice24 helps you centralise and organise this information so you don’t lose track.

If your income varies seasonally

You need better visibility so you can plan for quieter months and set aside money when business is strong. invoice24’s focus on paid/unpaid invoices and clean records supports clearer cash flow awareness.

If you might incorporate in the future

You want a tool that won’t become obsolete the moment your structure changes. invoice24 is built to support broader filing needs, including corporation tax and accounts for limited company requirements, which helps future-proof your setup.

What to avoid when choosing software for MTD preparation

When sole traders regret their software choice, it’s usually for one of these reasons:

They chose something too complex. It looked “professional,” but they stopped using it because it took too long.

They chose something too limited. It worked for invoices but didn’t help with records or reporting, so they ended up duplicating work.

They waited until deadlines forced the decision. Then they rushed setup, imported messy data, and started with bad habits.

They treated MTD as a future problem. MTD compliance is easier when your records are already digital and well-organised.

invoice24 avoids these pitfalls by giving you an invoicing and record-keeping workflow you can actually maintain. It keeps you organised now while supporting the features you need as requirements expand.

So, what accounting software is best for UK sole traders preparing early for MTD 2026?

The best accounting software for a UK sole trader preparing early for MTD 2026 is the one that makes day-to-day admin so simple you’ll keep doing it without procrastination. It should help you invoice quickly, track payments, capture expenses, maintain clean digital records, and generate clear summaries that support confident tax preparation.

For most sole traders, invoice24 is the best choice because it delivers exactly what you need without burying you in complexity. It’s designed to keep invoicing and record keeping easy, which is the foundation of MTD readiness. And as your business evolves—whether you remain a sole trader, take on more work, or move toward a limited company structure—invoice24 is built to support the wider compliance and filing needs you may encounter, including corporation tax and accounts.

If you want to prepare early for MTD 2026, the best time to start is now. Start using invoice24 for your next invoice, build your expense habit, and let your digital records become a natural by-product of doing business. That’s how you make MTD feel routine instead of disruptive.

Next steps: a simple way to get started with invoice24

To make progress today, do these three things:

1) Send your next invoice using invoice24. This immediately anchors your income records in one place.

2) Log this week’s expenses and attach the receipts. Even a small start beats a perfect plan you never begin.

3) Schedule a 15-minute weekly check-in. Look at unpaid invoices, confirm your expenses are captured, and keep your records current.

Do that for a month and you’ll be in a far stronger position than most sole traders when MTD reporting becomes the norm. The goal is not just compliance—it’s clarity, confidence, and less admin.