Free Self Assessment Software UK: The £50,000 Divide

The HMRC self assessment portal has been free since 2007. It still is. For most sole traders, that sentence is either the best news they will hear today or entirely beside the point, depending on a single figure: their annual qualifying income.

Since April 2026, Making Tax Digital for Income Tax has divided the self-employed into two groups with different compliance regimes, different software requirements, and entirely different answers to the question of whether free self assessment software covers what they actually need. The problem is that most of what appears when you search for free options was written before that line was drawn.

This post maps the actual landscape as it stands in mid-2026: which tools are genuinely free, who they work for, and where the conditions are buried.

The Number That Determines Everything

£50,000. That is the income threshold above which you are now legally required to use MTD-compatible software to file with HMRC. Below it, self assessment continues as before: annual return, single submission, 31 January deadline.

The figure refers to qualifying income from self-employment and property, not profit. A sole trader turning over £52,000 with £18,000 in deductible expenses still falls inside the MTD regime even though their profit is £34,000. This catches people off guard, particularly tradespeople whose materials costs are high relative to turnover.

The threshold matters because it determines which software you actually need. Not which software you want or which one came up first in a search. Which software satisfies your legal obligation.

Category One: HMRC's Own Portal

HMRC's online self assessment service is free. It requires no third-party software. You log in with your Government Gateway credentials, complete your SA100 form, and submit. HMRC processes it, calculates your bill, and the whole exercise costs nothing.

If your qualifying income is under £50,000, this is a perfectly legitimate option. HMRC continues to invest in the portal for below-threshold filers. The January 31 deadline still applies. The penalties for late filing under traditional self assessment remain familiar: £100 immediately upon missing the deadline, then escalating daily charges after three months.

What the HMRC portal cannot do is submit MTD quarterly updates. It was not designed for them. There is no quarterly MTD submission function because MTD uses a separate API architecture that requires third-party software to bridge the gap between your records and HMRC's systems. HMRC has published guidance making clear that above-threshold filers must use compatible software, and the portal is not on the compatibility list.

So: genuinely free, genuinely functional, but with a hard ceiling at £50,000 qualifying income. For anyone above that line, HMRC's own tool does not solve the problem.

Category Two: Bank-Bundled Software

Several UK business banks include accounting software as part of their account package. The most significant arrangement is FreeAgent, available at no extra cost to business account holders at NatWest, Royal Bank of Scotland, Ulster Bank, and Mettle. FreeAgent is fully MTD ITSA compatible and handles both quarterly submissions and the end-of-period statement.

On paper, this is the strongest deal available. You get a capable, HMRC-approved MTD tool at no additional monthly cost, provided you already bank with one of those institutions.

In practice, three conditions shape whether the arrangement is genuinely free.

The banking lock-in. FreeAgent's free access is tied to an active qualifying business account. Switch banks and you lose software access, typically within 30 days of closing the account. If you later move to a cheaper current account or a challenger bank better suited to your business, you inherit a software subscription cost you had not planned for. FreeAgent's standard subscription runs to roughly £19 to £25 per month as of 2026.

The data question. If you have used FreeAgent for two or three years, your complete transaction history, expense categories, client records, and tax submissions live inside it. Leaving is not a software swap. It is a data migration exercise at a moment when you least want disruption. The broader version of this problem is covered in Free Self Assessment Software: The Migration Problem, but the bank-bundled version carries an added wrinkle: the migration is not optional if your bank relationship ends for any reason outside your control.

The feature ceiling. Free tiers within bank partnerships sometimes exclude functions available on paid plans. Invoice volume limits, multi-currency handling, payroll processing, and certain reporting functions may require upgrading even while the core filing access remains free. For a plumber or electrician with straightforward income and expenses this is unlikely to matter. For a freelancer with multiple clients, currency exposure, or subcontractors, it may.

None of this makes bank-bundled software a bad choice. For a sole trader who is content with their current bank and wants MTD capability without a separate software bill, it works. But it is free in the same way that a gym membership bundled with your employer's benefits scheme is free: valuable while the relationship holds, costly the moment circumstances change.

Category Three: Freemium SA Tools

Several tools market themselves as free self assessment software while operating on a freemium model where the free tier handles the annual SA return and the paid tier handles MTD quarterly submissions.

GoSimpleTax has historically offered a free tier for straightforward returns. Nomisma (formerly SimpleTax) and similar products have operated similarly. The pattern is consistent across this category: free for one annual return, often covering basic employment and self-employment income; upgrade required to handle multiple income streams, MTD submissions, or VAT returns.

The structural problem with these tools is timing. Their free tiers were designed for a world where self assessment was the only game in town. Now that MTD has arrived for above-threshold earners, the relevant question is not whether the tool files an annual SA return for free. The relevant question is whether it files quarterly MTD updates without charging. In almost every case, the answer to that second question is no.

As we noted in Free Tax Software Answers the Wrong Question After April 2026, the tool that solved your previous compliance problem rarely solves the new one. The quarterly submission infrastructure is architecturally more complex than annual SA filing and costs providers substantially more to build and maintain, which is why it sits behind a paywall in every freemium product currently on the market.

The Threshold Trap: What Happens Near £50,000

The £50,000 line creates a specific problem for sole traders whose income fluctuates around that figure from year to year.

Consider a self-employed electrician whose income varies between £44,000 and £58,000 depending on how busy the year is. In a strong year, they are inside MTD. In a quieter year, they are not. HMRC's rules require registration for MTD ITSA based on the previous tax year's qualifying income. If last year's income exceeded £50,000, this year's quarterly submissions are mandatory regardless of what this year's income ultimately turns out to be.

The implication is that free SA software remains relevant as a category but not as a reliable long-term plan if your income sits anywhere near the threshold. A sole trader who commits to HMRC's free portal and earns £51,000 in a single year has a compliance problem from the following April that their chosen software cannot resolve.

Switching software mid-year, with quarterly submissions already missed or submitted incorrectly, is disruptive and potentially expensive to untangle. The more sensible approach is to select MTD-compatible software before income approaches the threshold, even if you are not yet required to use it. The cost of getting ahead of the requirement is small. The cost of catching up after penalty points have begun accumulating is considerably higher.

What the Market Is Not Telling You

HMRC maintains a list of MTD ITSA compatible software on its website. As of 2026, every product on that list charges for the MTD functionality. HMRC has not published a timetable for a free government-provided MTD filing tool, and as explored in Free Tax Return Software: The Government Tool HMRC Never Built, the incentive to build one is limited. MTD compliance drives adoption of commercial software, which generates VAT revenue and keeps the private sector lobbying satisfied.

The result is a market where "free self assessment software" remains technically possible for a shrinking and ageing segment of sole traders, and where the phrase is increasingly used to describe tools that are free only for the portion of your compliance obligations that is becoming less significant.

For anyone earning above £50,000, the honest answer to the question of whether free self assessment software exists is: not for what you are now required to do. The annual SA filing element remains free via HMRC's portal, but it is now the smaller part of a two-part obligation.

The Practical Decision Tree

Here is where the landscape leaves you as a sole trader in 2026.

Your qualifying income is reliably under £40,000. HMRC's free online portal is sufficient and fully compliant. Use it. Set a calendar reminder to review this decision if your income grows, and read the Self Assessment Software Free: The Deadline That Changes Everything post before that review.

Your qualifying income is between £40,000 and £55,000. You may not be inside MTD yet, but one good year brings you in. Consider bank-bundled software if you are already with a qualifying institution, or evaluate a low-cost MTD tool now so the transition is managed rather than reactive. Cheapest MTD Software: What Low Price Actually Buys You covers the paid options in detail.

Your qualifying income is above £55,000. You are legally required to use MTD-compatible software and have been since April 2026. The HMRC portal handles your annual declaration but not your quarterly updates. Free software does not meet your obligation in full.

You are unsure of your threshold status. Check your 2025-26 self assessment return. Your qualifying income is your total self-employment and property income before expenses. If it exceeded £50,000, you were in scope from April 2026 regardless of your profit figure.

The One Decision Worth Making Today

The search for free self assessment software is rational. Tax admin is expensive and time-consuming, and paying monthly for software you resent using feels like a second penalty on top of the tax bill itself. That frustration is legitimate, not a personal failing.

But the category of free self assessment software now describes a product that is appropriate for roughly half the sole traders searching for it. For the other half, including everyone whose income the £50,000 threshold has already swept into MTD, the free tools on the market do not cover the quarterly obligation that now defines their compliance position.

If you are above the threshold, the productive question is not whether you can get this for free. It is what the least expensive compliant option looks like. For most sole traders, that means a straightforward MTD tool at £10 to £15 per month, which costs less than a single penalty notice and considerably less than an accountant filing four quarterly updates on your behalf. And if you are currently with NatWest or RBS, check whether FreeAgent access is already sitting in your account dashboard, unused.

The HMRC portal will be there when you need it for your annual declaration. For the five submissions in between, you are going to need something else.