MTD invoicing software for UK tradespeople 2026: records vs filing

Most “MTD invoicing software” pages bury the only distinction that matters. Keeping digital records of the invoices you send is not the same as sending Making Tax Digital updates to HMRC.

If you are a sole trader or landlord who has to use Making Tax Digital for Income Tax, HMRC’s own software page says you need software that can do three things: create digital records, send quarterly updates, and submit your tax return. An invoicing app that stores your jobs in the cloud and lets you export a spreadsheet has done the first of those. It has not done the second or the third.

InvoiceAdept sits in that first group on purpose. We keep your invoice history, payment status and (on the right plan) CIS and VAT figures in a digital form you can hand to an accountant or import elsewhere. We do not file quarterly updates and we do not submit your Self Assessment return. If a sales page — including an older one of ours — made that sound like one-click HMRC filing, this article is the correction.

The same split applies to InvoiceFree. FreeAgent and QuickBooks sit in the filing group, at a different price and with a different amount of bookkeeping attached. What follows is how a UK trade should choose, using HMRC’s rules rather than software slogans.

What Making Tax Digital for Income Tax actually requires

Start on GOV.UK, not on a pricing grid. HMRC’s page Find out if and when you need to use Making Tax Digital for Income Tax (last updated 26 March 2026) is the live rule.

You need to use it if all of these apply:

• you are a sole trader or a landlord registered for Self Assessment

• you get income from self-employment or property, or both

• your qualifying income is more than the threshold for the relevant tax year

When you have to start depends on that qualifying income. HMRC’s current wording:

• over £50,000 for the 2024 to 2025 tax year — you should have started from 6 April 2026

• over £30,000 for the 2025 to 2026 tax year — from 6 April 2027

• over £20,000 for the 2026 to 2027 tax year — from 6 April 2028

HMRC will review your Self Assessment return each year and write to people who need to join. They also say that if you did not get a letter, it is still your job to check. There is a tool on that same page. Use it. Do not guess from a blog, including this one, if your figures are close to a line.

Qualifying income is not profit. On HMRC’s sign-up guidance it is total income from self-employment and property before expenses — turnover, in other words. A self-employed electrician on £58,000 of invoices and £22,000 of materials is over the 2026 line even if the year felt tight. That catches people who think “I don’t earn fifty grand”. You might not keep fifty. You may still have invoiced it.

Partnerships are flagged as coming later. HMRC says it will set out that timeline separately. If you trade as a partnership, watch GOV.UK rather than assuming the sole-trader dates apply.

Exemptions exist, including for people HMRC treats as digitally excluded. That is a real process, not a loophole you claim in an invoice app. Read HMRC, or ask the person who already files your return.

Records, quarterly updates, and the return: three different jobs

The confusion in the trades press comes from treating “MTD” as a single switch. It is three jobs that can live in one package or in two.

1. Digital records. Every invoice you raise is income. Every bag of fittings off your card is an expense. Under MTD those records have to live in software, not in a glovebox full of delivery notes. You can still keep paper. You cannot treat the paper as the only copy. This is the job invoicing software is actually good at, because the invoice is the income record.

2. Quarterly updates. Compatible software sends HMRC a summary of income and expenses for the quarter. It is not a tax payment. It is a digital update. Dates, categories and what happens if you correct a figure later are HMRC’s, not ours. Read Use Making Tax Digital for Income Tax for the current steps.

3. The tax return / final declaration. At the end of the year you still have to finalise the figures and submit through compatible software. Allowances, adjustments and the bits of income that are not your trade sit here. An invoicing tool will not know about your marriage allowance or a jointly owned flat.

HMRC does not provide the software. It publishes a finder. Anything that is not on that list has not been recognised to send those updates, whatever it prints on a dashboard.

VAT is a fourth job if you are VAT-registered. The VAT registration threshold is £90,000 of taxable turnover on a rolling 12 months, or if you expect to go over it in the next 30 days — GOV.UK register for VAT. MTD for VAT has been live for VAT-registered businesses for years. MTD for Income Tax is the new one. A product can be excellent at invoices and still file neither.

InvoiceAdept: what we do, and what we do not

InvoiceAdept is invoicing software for UK trades. On our pricing page (checked 28 August 2026):

• Free — £0, up to 5 invoices a month, one user, email, PDF, customer portal

• Pro — £7.99 a month excl. VAT: unlimited invoices, up to 3 users, Stripe card payments with no extra InvoiceAdept platform fee, automatic reminders, WhatsApp invoice delivery, branding, recurring invoices, quotes, expense tracking

• Pro+ — £12.99 a month excl. VAT: CIS, bank reconciliation, cashflow forecasting, advanced reports, audit log, unlimited users

Annual billing is advertised at 20% off. There is a 14-day trial of paid features.

What that means for MTD:

• Every invoice you send is a dated digital record of income, with customer, description, VAT if you charge it, and payment status.

• Expenses on Pro give you a place to put costs next to that income.

• You can export those records for an accountant or for software that does file.

• CIS on Pro+ keeps the deduction visible on the invoice, which is your income record as a subcontractor. It is not the contractor’s monthly CIS return, and it is not a filing to HMRC from us.

• We do not send quarterly MTD for Income Tax updates.

• We do not submit your Self Assessment return.

• We do not replace HMRC-recognised accounts software if you are in the mandated group and you intend to self-file.

If you are under the threshold this year, digital invoice records are still worth having. The threshold is falling in later years on HMRC’s published timetable. Getting the habit now is cheaper than reconstructing 12 months of WhatsApp photos in March.

If you are over the threshold, InvoiceAdept can be the front end — the bit you use on site to bill and get paid — while FreeAgent, QuickBooks, or your accountant’s package is the filing end. That two-tool setup is not a failure. It is how you avoid paying full accounts prices for a WhatsApp send button, and how you avoid pretending an invoicing app can talk to HMRC.

InvoiceFree: same category, different price shape

InvoiceFree is also an invoicing and digital record-keeping tool, not accounting software. Their own FAQ says you will still need an accountant or HMRC-approved software for tax filing. Believe them.

Checked 28 August 2026:

• Unlimited invoices and clients on the free plan

• CIS (0%, 20%, 30%) and VAT reverse charge on the free plan

• Plus at £7.99 a month for quotes, expenses and the payment chaser

• Bank transfer with no platform fee

• Optional Stripe links with a 1% platform fee plus Stripe’s own processing

For MTD records, InvoiceFree will store income (and expenses on Plus) digitally and let you export. It will not file. The practical difference versus InvoiceAdept is commercial, not tax-technical:

• InvoiceFree does not cap free invoices, so a busy CIS subcontractor can keep a complete digital income record at £0 if they stick to BACS.

• InvoiceAdept caps free users at 5 invoices, so a mandated sole trader who invoices weekly cannot use the free plan as their only income ledger. They would need Pro (£7.99 excl. VAT) or Pro+ if they also need CIS.

Neither fact makes either product “MTD software” in HMRC’s filing sense. Both can feed the software that is.

FreeAgent: this is what filing software looks like

FreeAgent is accounting software. It invoices, yes. It also connects bank feeds, categorises expenses, estimates tax, and — for sole traders — markets an end-to-end MTD for Income Tax path: quarterly updates and the final declaration to HMRC. That is the product you buy when you want one login to satisfy HMRC’s three-job list.

Pricing checked on FreeAgent’s live pricing page on 28 August 2026, listed excluding 20% VAT:

• Sole traders: £19 a month on the regular monthly price, with a published introductory rate of £9.50 a month for the first six months (50% off)

• Annual sole-trader regular price: £190 a year, with 50% off the first year advertised

• £0 if you have a business current account with NatWest, Royal Bank of Scotland or Ulster Bank (for as long as you keep the account), or a Mettle account with at least one transaction a month

• Optional Smart Capture Unlimited at £5 a month if you need more than 10 receipt captures

If you already bank with NatWest Group, FreeAgent is the default to try before you pay anyone else for filing. The invoicing inside it will not feel as trade-specific as InvoiceAdept or InvoiceFree — there is no CIS-on-a-free-plan pitch, and no WhatsApp send as a headline feature — but it can be the HMRC connection.

If you do not bank with them, £19 a month excl. VAT is a different conversation from £7.99. You are paying for bookkeeping and filing, not for a nicer PDF. That can still be cheap against an accountant’s time. It is not cheap against an invoicing subscription, because it is not the same thing.

FreeAgent’s own FAQ, on the same pricing page, still answers “Is FreeAgent MTD-compatible?” in VAT language (HMRC-recognised for MTD VAT returns). The sole-trader feature list separately describes MTD for Income Tax filing. When you sign up, confirm the Income Tax piece is live for your account type rather than assuming the VAT tick covers both.

QuickBooks: accounts software, several UK plans

QuickBooks UK sells itself as Making Tax Digital ready for Income Tax and VAT, with a dedicated sole trader offering and a pricing page. Plans are advertised plus VAT. Promotional discounts change. I am not going to print a monthly figure I could not confirm on the live pricing page while writing this. Open their pricing, look at Sole Trader versus Simple Start, and check whether the cheap plan includes VAT filing. Several UK write-ups note that the entry sole-trader plan is aimed at people who are not VAT-registered; if you are over the £90,000 VAT line you may need a higher QuickBooks tier. That is exactly the sort of trap invoicing apps do not have, because they were never filing VAT returns either.

What you are buying, if you buy QuickBooks, is the accounts suite: bank feeds, invoicing, expenses, and a filing path HMRC can recognise. What you are not buying is a small UK CIS/WhatsApp tool. You can invoice from it. Many trades do. You will also get a product designed for a wider small-business market, with a wider small-business price once the introductory offer ends.

Put QuickBooks in the same column as FreeAgent: filing software that happens to invoice. Put InvoiceAdept and InvoiceFree in the other column: invoicing software that happens to keep records.

Side-by-side, without pretending they compete for the same job

Stripe’s published UK rate for standard UK cards on 28 August 2026 was 1.5% + 20p (Stripe pricing). That is independent of whether InvoiceAdept or InvoiceFree created the link. InvoiceFree’s 1% sits on top. InvoiceAdept does not add a second percentage.

A practical setup for a tradesperson in 2026

There is no prize for using one app. There is a prize for not missing a quarterly update and not waiting 40 days to get paid.

If you are not yet mandated — qualifying income under the threshold on HMRC’s tool — use invoicing software that you will actually open on a phone. InvoiceAdept Free is enough for a handful of invoices. InvoiceFree is enough for unlimited invoices with CIS and no subscription. Keep receipts. When HMRC’s later thresholds reach you, your books will already be digital instead of being a camera roll.

If you are mandated and you have an accountant — this is most busy trades over £50,000 turnover. Raise invoices in InvoiceAdept or InvoiceFree. Export or share access. Let the accountant’s HMRC-recognised software send the updates. Paying £7.99 or £0 for invoicing plus an accountant is often saner than learning a full ledger on a Sunday.

If you are mandated and you want to self-file — pick software from HMRC’s finder. FreeAgent is the obvious UK-first option, and it is free with the right bank account. QuickBooks is the other household name. Confirm Income Tax (not just VAT) is included on the plan you click. You can still use InvoiceAdept for WhatsApp delivery if you want, but then you must not keep two conflicting income figures. Pick a source of truth. Usually that is the accounts package.

If you are VAT-registered as well — you already had MTD for VAT. Do not let a new Income Tax app duplicate VAT in a second place. Either file VAT where you already file it, or move VAT and Income Tax into one recognised suite. Invoicing apps can put 20% on a line. They cannot submit the VAT return.

If you are a CIS subcontractor — your invoice still has to show the deduction correctly. GOV.UK on CIS and what subcontractors must do are the rules: 20% if registered, 30% if not, materials out of the labour deduction. InvoiceFree does that for £0. InvoiceAdept does it on Pro+. Your MTD income figure is the gross you earned, not only the net that landed. Cheap software that hides the deduction will give your accountant the wrong year.

What “MTD-ready” should mean on an invoicing page

When we say InvoiceAdept is useful for MTD, we mean:

• invoices are born digital, with a unique number, a date, a customer and a value

• you are not retyping paper into a spreadsheet in the week the first quarterly update is due

• exports exist so filing software, or a human, can pick them up

• VAT and CIS can be shown on the document when your plan includes them

We do not mean:

• we are on HMRC’s Income Tax software list as a filing product

• tapping Send Invoice also taps Send to HMRC

• you can cancel your accountant and “the app will deal with MTD”

If you only remember one sentence from this page, remember that one.

Software vendors like the phrase because customers search it. HMRC likes precision because penalties sit on the filing side. Your job is to match the tool to the obligation, not to the advert.

Costs, in the order you should think about them

People compare monthly subscriptions and ignore the rest.

1. HMRC penalties and missed updates — these dwarf any of the prices in the table if you are mandated and you only kept PDFs in Downloads. Filing software, or an accountant with filing software, is the insurance. Invoicing software is not.

2. Getting paid — a customer who pays from WhatsApp this afternoon is worth more than a 1% argument. InvoiceAdept Pro exists for that. InvoiceFree’s 1% exists for that too, in a different shape.

3. Subscription — £0 (InvoiceFree invoicing, InvoiceAdept Free, FreeAgent-with-the-right-bank) versus £7.99–£12.99 (InvoiceAdept) versus £19 (FreeAgent sole trader list) versus QuickBooks’ live plan.

4. Card fees — Stripe at 1.5% + 20p on standard UK cards, plus InvoiceFree’s 1% if you use their link.

5. Your time — full accounting software is more powerful and slower to live in when you are on a roof. That is a real cost.

Pay for filing where filing is required. Pay for invoicing where invoicing is painful. Do not pay twice for a bank feed you will not reconcile, and do not skip filing because the invoice PDF looked professional.

Frequently asked questions

Does InvoiceAdept file Making Tax Digital updates to HMRC?

No. We keep digital records of invoices, payments and (on paid plans) expenses, and we let you export them. We do not send quarterly Income Tax updates and we do not submit your return. If you are mandated, use HMRC-recognised software or an accountant who does.

I earn less than £50,000. Can I ignore this?

Maybe for this tax year, maybe not. The £50,000 test is qualifying income for 2024 to 2025, before expenses, and it is already in force from 6 April 2026 for people over that line. HMRC has published lower thresholds for later years. Use HMRC’s checker. Digital invoice records are still useful below the line. They become mandatory above it.

Is InvoiceAdept on HMRC’s MTD software list?

Treat us as record-keeping and invoicing, not as filing software. HMRC’s finder is the list that matters for quarterly updates and the return. If we are not the product you authorise with HMRC, do not expect an InvoiceAdept button to replace that authorisation.

Can I use InvoiceAdept with FreeAgent or QuickBooks?

Yes, if you are disciplined. Invoice in one place, file in the other, and do not raise the same job twice. The cleanest version is: InvoiceAdept (or InvoiceFree) for sending and collecting; accounts package for bank, expenses that never hit an invoice, and HMRC. Ask your accountant which export they actually want — CSV, PDF pack, or access.

InvoiceFree says digital records for MTD too. Which should I use?

For filing, neither. For records, pick on invoicing grounds. InvoiceFree: unlimited free invoices, CIS on free, 1% on Stripe links. InvoiceAdept: 5 free invoices, CIS on Pro+, WhatsApp send and no extra platform fee on Pro. There is a full comparison in InvoiceAdept vs InvoiceFree.

Do I still need to keep paper invoices?

Keep what HMRC asks you to keep. Digital records are the MTD requirement. Paper copies of customer invoices are still useful when a main contractor’s accounts team cannot open a link. They are not a substitute for the digital record if you are in MTD.

What about CIS monthly returns?

CIS is a deduction scheme, not MTD for Income Tax. Contractors file CIS returns to HMRC. Subcontractors need the right rate on the invoice and the right registration. InvoiceAdept handles the invoice side on Pro+. InvoiceFree handles it on the free plan. Neither filing the CIS return nor MTD quarterly updates is “done” just because the PDF showed −20%.

Will InvoiceAdept add HMRC filing later?

If we do, it will be described as filing, listed against HMRC’s recognition process, and priced as that kind of product. Until then, assume we do not file. Plan your 2026 setup on that basis.

If you want the invoicing half of this sorted first, start on the free plan — five invoices, no card required — and talk to whoever files your tax before the next quarter date, not after it.