How to Choose MTD-Compatible Software: A Compliance Selection Checklist for 2026

Making Tax Digital for Income Tax (MTD for ITSA) requires taxpayers within scope to keep digital records and submit via compatible software. If you need to implement software, choose a tool that is compliant and reduces day-to-day admin. The checklist below follows HMRC guidance and is written as a practical selection checklist for sole-traders and landlords

1) Verify core compliance 

Your software should allow you to:

• Create, store and correct digital records for income and expenses.

• Send quarterly updates for each income source.

• Consider software that also supports submitting the year-end Final Declaration by 31 January, so you can complete everything in one place (not a must-have, as this can be done in a separate MTD-compatible app or by your agent).

Action for you: Ask the vendor to confirm these three capabilities in writing for all income sources you need (sole-traders or landlords) 

2) Decide between all-in-one or a connected “stack”

HMRC allows two approaches:

• a single, end-to-end product that covers digital records, quarterly updates and the Final Declaration, or

• multiple products connected by compliant digital links (e.g., spreadsheets with bridging software).

That setup is possible, but a dedicated end-to-end app is usually the better choice because:

• Fewer moving parts = fewer failures. One system reduces breakpoints between tools, keeps a cleaner audit trail and lowers the risk of broken links before a deadline.

• Built-in validation and guidance. A unified app can flag category errors, missing periods and authorisation issues in real time, helping you file accurate updates and the Final Declaration on time.

• Single vendor accountability. One support team responsible for the whole workflow (records → updates → year-end) speeds issue resolution and avoids “blame the other tool” loops.

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3) Confirm support for your update periods and accounting method

Software must work with your chosen update periods (standard tax-year alignment or calendar update periods). You select this at the start of the tax year. Ensure the product also supports your accounting method (cash or traditional/accruals).

What to check: Where you set update periods during setup, and what safeguards exist to avoid mis-configuration.

4) Coverage for other income you must report

You keep digital records for self-employment and property, but your tax return still includes other income (PAYE, savings interest, dividends, pensions, partnerships). Your software should let you add these so you can complete the Final Declaration.

Action for you: If your income mix may change, verify that adding or removing sources later is supported.

5) In-year visibility and clear year-end workflow

After each quarterly update, you should be able to view an in-year tax estimate and identify issues early. The product should guide you from quarterly updates through year-end adjustments and the Final Declaration.

Vendor check: Ask to see the in-product journey from Q1 update → year-end adjustments/EOPS → Final Declaration.

6) Multiple businesses and jointly-let property

If you have more than one trade or property business, your software should keep them separate and manage the correct quarterly submissions. For jointly-let property, you may choose to submit income only during the year and add expenses at year end – your tool should support that choice.

What to check: Separate ledgers/income sources, and configurable options for jointly-owned property.

7) Data portability (easy export)

You should be able to export your digital records in usable formats including categories and, ideally, attachments or audit trails. This matters if you switch providers or cease trading.

8) Practical onboarding and deadline readiness

Look for setup guidance aligned to HMRC’s steps (choose software → authorise → create digital records → send updates → submit return). Confirm support coverage around deadline months (August/November/February/May).

Action for you: Ask about support channels/hours, response targets, and any onboarding checklists.

9) Pricing and plans that fit how you pay

Some products offer only annual plans; others provide monthly and annual options. Choose pricing that fits cash flow and check for add-ons (extra businesses, additional submissions, storage).

Vendor check: Clarify what’s included in each plan and whether you can switch plans without penalty.

Concise Selection Checklist

• Supports digital records, quarterly updates, and Final Declaration for your income sources.

• Implements compliant digital links (no manual copy-paste).

• Handles your update periods (standard or calendar) and accounting method.

• Provides in-year tax estimates and a guided year-end/EOPS flow.

• Manages multiple trades/properties and jointly-owned property options.

• Delivers robust data export

• Clear onboarding, documentation, and deadline-period support.

• Transparent monthly and annual pricing without hidden add-ons.

• Security, uptime, and a published update/roadmap cadence.

Why EasyInvoice aligns with this checklist

EasyInvoice is being rebuilt specifically for the new MTD for ITSA requirements: compliant digital record-keeping, smooth quarterly updates, and a clear, guided year-end submission. You’ll get a modern web app and mobile apps, with an actively developed roadmap driven by user feedback. Throughout the year, integrated tax estimates help you understand your position well before deadlines. Our support focuses on helping you use the product effectively and navigate the process the software must follow under MTD (product support only – not tax advice).

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