Bank Free MTD Tools
Compared
Your bank's free MTD tool is real, it costs nothing, and it will handle your quarterly updates. Here is exactly where it stops, and what that means in January.
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Total turnover before expenses
Under £1,000 we use the trading allowance automatically
Estimated tax bill
£6,872
15.3% effective rate for 2026/27
- Income tax
- £5,286
- Class 4 NI
- £1,586
Take-home pay
£32,128
after tax, NI and expenses
This is an estimate using HMRC-confirmed rates for 2026/27, not your official tax calculation. TapTax is MTD-compatible, so you can connect to HMRC and file the real figures in a couple of taps.
Monzo, Starling, Lloyds and Tide have all put a free Making Tax Digital tool inside their business accounts, and ANNA has built its filing offer around the same idea. There is no catch on price. These are free, they are on HMRC's directory, and for a lot of sole traders they will handle the quarterly cycle without anyone paying anything.
The catch is on scope, and it is precise enough to state exactly. As of the 5 August 2026 scrape of HMRC's find-software directory, not one of these five products can complete a single one of the 16 tax-return items.
- As of the 5 August 2026 scrape, all five bank tools are graded ready for digital record keeping and quarterly updates, and all are graded at zero of HMRC's 16 tax-return items.
- They have not ignored the gap: Monzo and Lloyds list all 16 items as in development, ANNA 14, Starling and Tide 13 each.
- Tide handles sole trader income only, so landlords cannot use it; Monzo, Starling and Lloyds cover UK property as well.
- None of the five covers foreign property, and none supports agent access for an accountant.
- The sensible pattern is to use the bank tool through the year and move to a complete product at final declaration, or start with one product that does both.
What the directory actually says about bank tools
| Product | Free | Sole trader | UK property | Foreign property | Mobile app | Return items |
|---|---|---|---|---|---|---|
| Monzo | Ready now | Ready now | Ready now | Not included | Android; Apple iOS | 0/16 |
| Starling | Ready now | Ready now | Ready now | Not included | Not listed | 0/16 |
| Lloyds Bank | Ready now | Ready now | Ready now | Not included | Not listed | 0/16 |
| Tide Accounting | Ready now | Ready now | Not included | Not included | Android; Apple iOS | 0/16 |
| ANNA Self Assessment | Not included | Ready now | Ready now | Not included | Android; Apple iOS | 0/16 |
| SumUp Accounting | Ready now | Ready now | Not included | Not included | Not listed | 0/16 |
HMRC lists what each vendor declares. Feature flags, mobile-app support in particular, are vendor claims rather than verified facts, and listings change. Check with the vendor before you buy. Data: HMRC find-MTD-software service (tax.service.gov.uk), scraped 5 August 2026.
The zero in the return-items column is the whole story of this page. To put it in context:
87of 122 (71%)cannot complete a single tax-return itemHMRC MTD for Income Tax directory, scraped 5 August 2026The banks are not outliers. They are part of the largest single group on the directory: products built to keep records and send quarterly updates, full stop. What makes the bank tools distinctive is that they are the best-distributed members of that group, sitting inside apps that millions of people already open every week.
- Quarterly update vs final declaration
- A quarterly update is a cumulative summary of business income and expenses for one income source, sent four times a year. The final declaration is the annual step that pulls in everything else, employment income, dividends, interest, pensions, student loan, Marriage Allowance and the rest, and confirms your tax liability. Software can be excellent at the first and incapable of the second, which is exactly what HMRC's 16 tax-return items measure.
The honest read on each one
Monzo is graded ready for sole trader and UK property income, keeps digital records natively, supports calendar update periods, and lists an iOS and Android app. All 16 return items are graded in development, which is the most complete commitment of any of the five. The MTD tool sits inside the Monzo Business account.
Starling was first to ship free in-account MTD filing, and it is graded ready for sole trader and UK property. Two details the marketing does not lead with: it is graded not included for calendar update periods, the only one of the five with that restriction, and the directory lists it as web browser with no mobile app despite Starling being a mobile-first bank. Thirteen of the 16 return items are in development.
Lloyds Bank is the high-street entrant, graded the same as Monzo on income sources and calendar quarters, with all 16 return items in development. The directory lists it as web browser only.
Tide Accounting carries the sharpest limitation of the group: it is graded ready for sole trader income and not included for UK property. If you have a rental property, Tide's MTD tool cannot file for it as of this scrape. Thirteen items in development, iOS and Android listed.
ANNA Self Assessment is the odd one out in a useful way. ANNA's own pricing (August 2026) describes free MTD quarterly and year-end filing as permanent with no strings, monetising through the account instead: pay-as-you-go at 0.95% commission, or up to £22.90 plus VAT a month for the Business plan. HMRC's directory, however, does not flag a free version for it. It is also the only one of the five graded ready for bridging, so it can take figures from a spreadsheet. Fourteen items in development. We compare it directly in TapTax vs ANNA.
SumUp Accounting is included here because it follows the same pattern from a payments company rather than a bank: free, sole trader only, no UK property, nine items in development.
"In development" is a promise, not a feature
It would be unfair to write these tools off. Every one of them has told HMRC that the return items are coming, and that is meaningfully different from declaring them out of scope.
94of 122 (77%)carry at least one "in development" promiseHMRC MTD for Income Tax directory, scraped 5 August 2026It is also a promise made by most of the directory, which is why it cannot be the basis of your decision. The 2026-27 filing season is the first one where these commitments get tested against real final declarations. If you are choosing software you will rely on in January, the question to put to your bank's support team is not whether the items are coming, but whether they will be live before your final declaration is due.
Banks have solved distribution for MTD, not completeness. A free tool inside an app you already open every day will collect the quarterly updates. It is the final declaration, where employment income, dividends, pensions and student loans arrive, that decides whether you need a second product.
Who a bank MTD tool is genuinely fine for
Be honest with yourself about your own return. A bank tool is a good fit if all of the following hold:
- One self-employment income source, paid into that bank account.
- No employment income alongside the trade, so no PAYE figures to bring in.
- No dividends, no meaningful savings interest, no pension income.
- No student loan repayments, no High Income Child Benefit Charge, no CIS deductions.
- No overseas property, and, if you are with Tide or SumUp, no property at all.
That describes a real and large group of people, and for them £0 inside the banking app is a sound answer. Everyone else is choosing between two workable patterns.
Pattern one: bank tool now, complete product at year end
Run quarterly updates free through the bank, then move to a product that can complete the return before your final declaration. This works because MTD quarterly updates are cumulative: the new product submits year-to-date totals, so a mid-year switch does not leave a gap as long as you carry your figures across.
The costs are real but modest: exporting your records, reauthorising HMRC, and learning a second tool at the busiest possible moment. Doing it in November rather than January is the difference between a chore and a problem.
Pattern two: one product that does both
Start with something that handles the quarterly cycle and the return, and never do the handover. Free options here include My Tax Digital, TaxHeaven and Clear Books Free, all graded on 15 of the 16 return items and all £0 as of August 2026, though all are web-first rather than app-first. Our genuinely free MTD software page covers the conditions attached to each.
If you want to think through the two-product question properly, including what HMRC's own guidance says about it, we have written that up in do I need more than one MTD product?
Where TapTax sits, honestly
TapTax is built for the second pattern: a permanent free tier at £0 a month with £4.99 and £9.99 tiers above it, a real iOS and Android app, open-banking import from the same accounts these banks provide, AI categorisation, receipt scanning and CSV import with presets for 16 UK banks. It covers sole trader, UK property and foreign property, which is more than any of the five bank tools on this page.
The caveats we would want you to weigh:
- TapTax is MTD-compatible and going through HMRC's recognition process, and it does not appear on the find-software directory as of the 5 August 2026 scrape. Every bank tool named here is listed today.
- On the 16 return items TapTax is mid-pack, not top of the table. Interest, dividends, charitable giving, the High Income Child Benefit Charge and Class 2 and 4 National Insurance are handled; pensions income, CIS, capital gains and partnership income are not there yet. That is ahead of the bank tools' zero, and behind the 15-item cohort.
The full dataset is searchable on the MTD software directory, and our analysis of all 122 tools explains why so much of the directory stops at quarterly updates.
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