Bank Free MTD Tools
Compared

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 17 October 2026 scrape of HMRC's find-software directory, four of these five products cannot complete a single one of the 16 tax-return items, and the fifth, ANNA, completes 12.

What the directory actually says about bank tools

Bank and fintech MTD tools, as graded on 17 October 2026.

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	Ready now	Ready now	Ready now	Not included	Android; Apple iOS	12/16
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 17 October 2026.

The zeros in the return-items column are most of the story of this page, and ANNA's 12 is the exception. To put it in context:

104of 159 (65%)cannot complete a single tax-return itemHMRC MTD for Income Tax directory, scraped 17 October 2026

The 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, level with Lloyds, is the largest 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 now flags a free version for it too. It is also the only one of the five graded ready for bridging, so it can take figures from a spreadsheet, and if that is how you want to work our free MTD spreadsheet template and bridging cost breakdown covers the other 77 products that will do the same job. It is also the only one of the five with return items graded ready: 12 of the 16, with partnership income and private pension contributions in development and foreign interest and capital gains not included. 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.

112of 159 (70%)carry at least one "in development" promiseHMRC MTD for Income Tax directory, scraped 17 October 2026

It 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, and if you are willing to pay something for a complete return, how much MTD software costs shows that the paid floor is £20 a year rather than the £100-plus most people assume.

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, CSV bank-statement import from the same accounts these banks provide, with presets for 16 UK banks and direct bank connection coming soon, plus AI categorisation and receipt scanning. 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 HMRC-recognised, with its directory listing pending, and it does not appear on the find-software directory as of the 17 October 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 zero at Monzo, Starling, Lloyds and Tide, but behind ANNA's 12 and the products graded at 15 or 16.

The full dataset is searchable on the MTD software directory, and our analysis of every tool explains why so much of the directory stops at quarterly updates.

People also ask

Does using my bank's MTD tool mean HMRC sees my bank account?

No. The MTD APIs receive summarised income and expense totals for each income source, not your transaction feed and not access to your account. What the bank tool does is read your own transactions, which it already has, categorise them, and submit the totals. HMRC also requires fraud prevention headers with every submission, which describe the device and connection making the call rather than your banking data. Your account access stays between you and the bank.

What happens if I close the business account my MTD tool is attached to?

You lose the tool, and potentially the digital records held inside it, which is the structural risk of MTD software bundled with a bank account. HMRC requires digital records to be kept for at least five years after the 31 January submission deadline for the relevant tax year. Before closing an account, export your records in a portable format and confirm your new software can import them. This is the main argument for keeping tax software independent of banking, even when the bundled option is free.

Can my accountant access my bank's MTD tool?

Generally not. None of Monzo, Starling, Lloyds, Tide or ANNA is graded as offering agent software as of the 17 October 2026 scrape, against 86 of the 159 listed products that are. In practice that means your accountant cannot log in as an agent and file on your behalf from these tools, and would instead work from exported figures or their own software. If you use an accountant for your return, agent support is worth checking before you settle on a bank tool.

Are bank MTD tools available if I am not mandated yet?

Yes, and voluntary sign-up is a reasonable use of them. MTD for Income Tax is mandatory from April 2026 above £50,000 of qualifying income, April 2027 above £30,000 and April 2028 above £20,000, but you can join voluntarily before your date. Doing a year of quarterly updates on a free bank tool while nothing is at stake is a low-cost way to learn the rhythm, and it tells you early whether the tool covers everything your return needs.