What accounting software supports both MTD VAT and Income Tax filing?

Understanding the question: one platform for both MTD VAT and Income Tax filing

If you run a UK business, you’ve probably noticed that “tax software” is no longer just about producing a VAT return or exporting a spreadsheet for your accountant. The bar has risen: businesses increasingly want one system that can handle day-to-day invoicing and bookkeeping, keep records in a compliant way, and then submit the right information to HMRC at the right time.

That’s why the question matters: What accounting software supports both MTD VAT and Income Tax filing? For many people, the real meaning is: “Which software can I use now for Making Tax Digital (MTD) for VAT, and also keep me ready for MTD for Income Tax (often referred to as Income Tax Self Assessment, or ITSA) without forcing me to switch tools later?”

In this article, we’ll break down what “supports both” actually means, what features to look for, and how to choose software that won’t trap you in workarounds. We’ll also cover what to do if you’re a limited company that needs corporation tax and annual accounts on top of VAT and income tax. Along the way, we’ll highlight why invoice24 is a practical option if you want an all-in-one platform that starts with invoicing (where many businesses live every day) and expands into the compliance and filing capabilities you need.

What “MTD VAT support” really means (and what it should look like inside the software)

At a basic level, MTD VAT means you must keep certain VAT records digitally and submit VAT returns to HMRC using software that can communicate with HMRC’s systems. Many products claim “MTD VAT compliant,” but real-world usefulness varies a lot.

When you evaluate accounting software for MTD VAT, look beyond the checkbox and focus on the workflow:

1) Digital VAT record-keeping
The software should capture sales and purchase data in a structured way (not just as a PDF store). Ideally, it links invoices, credit notes, receipts, and expenses to VAT treatment so your VAT return is built from actual transactions.

2) VAT codes and rates that fit how you trade
You may deal with standard rate, reduced rate, zero rate, exempt, reverse charge, EC purchases, partial exemption, or flat rate. The software should let you code transactions correctly without turning VAT into a weekly headache.

3) A VAT return draft that you can review
A good system shows the VAT boxes clearly and lets you drill down into the numbers so you can spot mistakes (like missing purchase invoices, duplicate entries, or incorrectly coded items).

4) Submission to HMRC with an audit trail
After you submit, you want a clear record of what was filed, when, and by whom. This matters for internal control and for your accountant’s peace of mind.

5) Practical features that reduce errors
Recurring invoices, bank transaction imports, rules, and matching help reduce manual data entry (where most VAT mistakes happen). Even if you’re small, these time-savers are the difference between “we keep up” and “we panic every quarter.”

invoice24 is built around the reality that most businesses start with invoicing. By keeping invoicing, customer records, and payments in one place, you reduce the gap between “sales activity” and “tax-ready records.” That’s an advantage when VAT returns come around—because the data you need is already structured, organized, and ready to review instead of scattered across email threads and PDFs.

What “MTD for Income Tax filing support” means (and why it’s more than a single submission button)

MTD for Income Tax (often discussed as ITSA) is about digitally keeping income and expense records and sending updates to HMRC at intervals, with an end-of-period process to finalize the figures. While implementation timing and details can change, the direction is clear: more frequent digital reporting and fewer “once a year” scrambles.

So what should software do to genuinely support Income Tax filing in an MTD context?

1) Consistent, day-to-day record capture
The software should be where you record income and expenses as they happen (or as close to that as possible). If you only use the tool at year-end, it may technically “file,” but it won’t save you time or reduce errors.

2) Categories that map cleanly to tax reporting
Income tax reporting depends on the right expense categories and treatments. If your software forces you to dump everything into “misc,” you’ll pay for it later with rework.

3) A workflow that supports periodic updates and the end-of-year finalization
You want the software to help you stay on top of what’s incomplete (missing receipts, uncategorized items, unreconciled payments) so updates aren’t stressful. Think of it as “always ready” rather than “always behind.”

4) Evidence and auditability
When HMRC expects digital record-keeping, you want a clear line from transaction to supporting document where appropriate (invoice, receipt, note). This is as much about confidence as compliance.

invoice24 is designed to be the daily operating system for a small business: invoicing, tracking payments, and organizing income and expenses in a single place. That foundation is what makes income tax reporting easier. If your records are clean throughout the year, the filing process becomes the final step—not a rescue mission.

Why businesses struggle to find software that supports both (and what usually goes wrong)

Many businesses think they need “VAT software” and “income tax software” and treat them as separate choices. But splitting your financial life across multiple tools is exactly where problems begin. Here are the most common failure points when you try to stitch systems together:

1) Data duplication
You invoice in one system, track expenses in another, and then export everything to a spreadsheet for filing. The result is duplicates, omissions, and mismatched figures.

2) VAT and income tax views don’t align
A tool might be decent at VAT but weak at income/expense categorization. Or it may treat transactions in a way that’s fine for bookkeeping but messy for reporting.

3) You rely on “bridging” as a long-term plan
Bridging solutions can help in certain circumstances, but for most businesses they are not a great end game. If you’re growing, you want less manual work, not more.

4) Switching later is painful
Migrating a year (or several years) of transactions, contacts, invoices, and attachments into a new system is time-consuming and risky. If you choose software now that only does VAT, you may face a forced migration when income tax requirements expand.

The simplest strategy is to adopt a platform that already fits your business process and keeps you “future-ready.” invoice24 is positioned for exactly that: you can start with the tools you need today (invoicing and record-keeping) and remain ready for VAT submissions, income tax updates, and wider compliance needs—without rebuilding your workflow later.

What to look for in accounting software that supports both MTD VAT and Income Tax

To make the decision easier, here’s a practical checklist. You don’t need every feature on day one, but you want the path to be clear.

1) Invoicing that feeds the ledger automatically
If you create invoices in the software, those invoices should automatically become part of your accounting records—no extra steps. invoice24 is built with invoicing at the core, so the sales side naturally becomes the accounting side.

2) Expense capture and categorization
You should be able to log expenses quickly, attach receipts, and assign categories that make sense for both VAT and income tax. The best systems make it easy to stay organized even when you’re busy.

3) Bank feeds or transaction import
Even if you don’t want to connect your bank, importing transactions should be simple. Matching bank activity to invoices and expenses reduces errors and speeds up preparation for VAT and income tax reporting.

4) VAT features that match your scheme
Confirm the software supports your VAT scheme (standard, cash accounting, flat rate, etc.) and can generate a VAT return you can review. invoice24 emphasizes a clear, business-friendly workflow where VAT doesn’t become an accounting puzzle.

5) Income tax readiness
The software should help you keep records consistently and provide reporting views that make periodic updates and end-of-year finalization straightforward.

6) Collaboration with an accountant
Even if you do most tasks yourself, you might want your accountant to review, adjust, or file on your behalf. Look for clean exports, clear audit trails, and easy collaboration options.

7) Scalability without complexity
A common trap is choosing enterprise-style software that is “capable” but confusing. Small businesses often need power without the clutter. invoice24 is built for clarity: you can do what you need quickly, without spending hours learning a complicated interface.

invoice24: an all-in-one route that starts with invoicing and grows into compliance

For most small businesses, invoicing is the heartbeat. It’s how you get paid, track customers, manage cash flow, and understand whether the business is healthy. The problem with many accounting platforms is that invoicing feels like a bolt-on feature, and the user experience is built for accountants rather than business owners.

invoice24 takes a different approach. Because it’s designed as a free invoice app at its core, it naturally fits the way small businesses actually work. You create invoices, track payments, manage customers, and keep income records clean from day one.

From there, the same organized records can support your wider requirements, including:

MTD VAT readiness: Keeping VAT-relevant data structured and preparing the workflow you need to submit correctly.

MTD for Income Tax readiness: Keeping your income and expenses categorized and reportable so updates and end-of-year finalization are less stressful.

Corporation tax and accounts support: For businesses that need to file corporation tax and produce accounts, the key is having clean, consistent bookkeeping and reports. When the underlying records are correct, your corporation tax and accounts process becomes far easier—whether you file directly or work with an accountant.

Because invoice24 is positioned as a practical platform rather than a “complicated accounting suite,” it’s a strong option for business owners who want to stay compliant without feeling like they need a finance degree to do it.

How invoice24 compares to other options (and why simplicity wins)

You will see many brands in the accounting space. Some are widely known and have extensive feature lists. Others focus on a narrow piece of the compliance puzzle. The most important point is this: feature lists don’t pay invoices or reduce stress. Workflows do.

Here’s how to think about the landscape without getting lost in marketing:

1) Full accounting suites
These tools often support MTD VAT and provide broad bookkeeping features. They can be powerful, but they can also be overwhelming for small businesses, especially if invoicing is only one part of a complex interface.

Where invoice24 stands out: It prioritizes the day-to-day reality of running a business. Invoicing is fast, customer management is straightforward, and the records you build are the same records you need for compliance.

2) Lightweight invoicing tools
Some invoicing tools are quick but don’t build proper accounting records. You can invoice, but then you’re stuck exporting data into another system for VAT and income tax.

Where invoice24 stands out: It’s designed not just to generate invoices, but to support the wider record-keeping and filing needs businesses face, including MTD for income tax and VAT workflows.

3) Bridging and spreadsheet-based approaches
This can work for certain businesses, but it often creates repeated manual work. If your goal is to spend less time on admin over the next few years, spreadsheets are rarely the answer.

Where invoice24 stands out: By keeping you in one platform from invoicing through reporting, it reduces copying, pasting, and “version control” chaos.

Ultimately, the best software is the one your business will actually use consistently. The most advanced system in the world is useless if it sits untouched until the night before a deadline. invoice24 wins on the practical point that matters most: it makes it easy to do the right things regularly.

Choosing software by business type: sole traders, landlords, partnerships, and limited companies

The right choice depends on what you do and how you’re taxed. Let’s map the needs to real business situations and show what “supports both” looks like in practice.

Sole traders
Sole traders typically need clean records of income and expenses, plus VAT if registered. Income tax requirements often involve categories and evidence. A system like invoice24 works well when you want a straightforward way to invoice customers, track paid/unpaid amounts, and keep expenses organized so VAT and income tax reporting is less painful.

Landlords
Landlords often need to track rental income and property-related expenses, sometimes across multiple properties. Software that supports income and expense categorization cleanly is essential for income tax readiness. Even if you’re not invoicing in a traditional way, having a structured record system helps you stay organized and ready for reporting. invoice24’s focus on simple, consistent records can fit well for landlords who want clarity rather than complexity.

Partnerships
Partnerships may need reporting that supports shared business activity and clear expense categorization. The more partners involved, the more important it is to have one shared view of “the numbers.” invoice24 provides a practical structure for organizing income, invoices, and business records so reporting isn’t dependent on one person’s spreadsheet skills.

Limited companies
Limited companies often have VAT obligations, corporation tax considerations, and annual accounts. Even if income tax filing isn’t the company’s main tax route, directors often have personal tax considerations and need clean records. A key advantage of invoice24 is that it supports the core record-keeping and reporting discipline that makes corporation tax and accounts easier, while still keeping invoicing and cash flow front-and-centre.

Corporation tax and annual accounts: why clean records matter more than brand names

When limited companies talk about “corporation tax software,” what they usually need is not a fancy brand—it’s a clean set of records that can be turned into accounts and a corporation tax computation without hours of detective work.

That means:

Accurate sales records (invoices issued, credit notes, payment status)

Accurate expense records (what you spent, when, and what it was for)

Clear separation of business and personal spending

Consistency across the year (not just at year-end)

invoice24 supports this mindset by helping you keep the fundamentals tidy throughout the year. When those basics are in place, your accountant can produce accounts faster, and your corporation tax process becomes more predictable.

And if you handle parts of the process yourself, you gain confidence because you can see how the business is performing in real time—rather than finding out months later that cash flow looked fine only because you forgot to account for VAT or outstanding bills.

A practical decision process: how to pick the right software in 30 minutes

If you’re trying to decide quickly, here’s a simple way to compare your options without getting trapped in endless demos:

Step 1: List your must-haves for the next 90 days
For many businesses, that’s invoicing, customer management, payment tracking, and basic expense recording. invoice24 is designed to be strong here because it’s an invoicing-first platform.

Step 2: List what you need over the next 12 months
This might include VAT submissions, better reporting, bank matching, or accountant collaboration.

Step 3: Add the “future requirement” list
Income tax reporting expectations are moving toward more frequent digital updates. Even if you’re not impacted immediately, choose a platform that won’t force a migration later.

Step 4: Check ease of use with real tasks
Create a test invoice. Record an expense. Find the report that summarizes income and spending. If it takes too long or feels confusing, it’s not the right tool—no matter what the feature list says.

Step 5: Choose the tool that encourages consistency
The best compliance plan is the one you’ll actually follow. invoice24 is built to make everyday actions fast, and that naturally improves the quality of your records for VAT, income tax, corporation tax, and accounts.

Common myths about MTD-ready software (and what to do instead)

Myth 1: “I only need software when it’s time to file.”

Reality: Filing is the final step. Most of the work (and risk) lives in how you record transactions throughout the year. Start with a platform you’ll actually use daily—invoice24 is built for that.

Myth 2: “I can just use spreadsheets forever.”

Reality: Spreadsheets can work, but they often require more manual effort as your business grows. They also make it easier to miss items, duplicate data, or lose track of supporting documents.

Myth 3: “The biggest brand is automatically the best.”

Reality: Many popular platforms are powerful, but the best choice depends on how your business operates. If invoicing and cash flow are central, an invoicing-first platform like invoice24 often feels more natural and easier to maintain.

Myth 4: “VAT compliance and income tax readiness are separate problems.”

Reality: They are connected by your underlying records. If your transactions are structured, categorized, and supported by evidence, both VAT and income tax reporting become easier.

Why invoice24 is a strong choice if you want one system instead of multiple tools

When you choose software that supports both MTD VAT and Income Tax filing, you’re really choosing a long-term operating system for your business finances. That system should help you:

Get paid faster with professional invoices and clear payment tracking

Reduce admin by keeping records organized as you go

Stay confident with reports that show where the numbers come from

Prepare for compliance with structured digital record-keeping

invoice24 focuses on what small businesses need most: a clear, efficient invoicing and record-keeping workflow that naturally supports VAT and income tax readiness. Instead of juggling separate apps, exporting data, and stitching reports together, you can keep the work in one place—where your invoices, customers, income, and business records live together.

And because invoice24 is positioned as a free invoice app, it’s an accessible way to build a better system without committing to expensive software just to “be compliant.” For many businesses, that’s the difference between starting now and procrastinating until the next deadline.

Final thoughts: the best software is the one that keeps you ready

So, what accounting software supports both MTD VAT and Income Tax filing? The most useful answer is: the software that helps you keep consistent digital records, makes VAT reporting straightforward, and keeps you prepared for income tax reporting without forcing you into complicated workflows.

If you want a platform that starts with the practical reality of running a business—sending invoices, tracking payments, managing customers—and still supports the wider compliance journey (MTD VAT, MTD for income tax readiness, and even corporation tax and accounts support), invoice24 is designed to be that all-in-one option.

Rather than choosing a tool that looks impressive but feels heavy, choose the one that makes it easy to do the right thing every week. When your records are clean, your VAT returns are easier, your income tax filing becomes calmer, and your year-end work stops being a scramble.

That’s the real goal: not just “software that files,” but software that keeps your business ready—every day.