Xero Alternatives for MTD for Income Tax (2026)
Looking for a Xero alternative for Making Tax Digital for Income Tax? Why people switch, the range of alternatives from bridging tools to purpose-built MTD apps, and how to pick the right fit for a sole trader, landlord or practice.
The short answer
Xero is a full cloud accounting platform that supports MTD. People look for alternatives when they want something simpler or lower-cost, prefer a desktop or privacy-first app, or only need MTD for Income Tax rather than complete accounting. Alternatives span bridging tools, other cloud suites, and purpose-built MTD apps like ThisQuarter — the right one depends on how much accounting you need.
Xero is a polished, powerful cloud accounting platform — and for businesses that need full bookkeeping, it earns its place. But if you mainly need to meet Making Tax Digital, it may be more than the job requires. Here's how to weigh alternatives.
Why people look for an alternative
Xero is built for full accounting: bank feeds, invoicing, reconciliation, reporting, multi-currency — plus MTD. People seek alternatives when:
- they want something simpler and cheaper for a single trade or a few properties;
- they'd rather have a desktop or privacy-first app than cloud;
- they only really need MTD for Income Tax, not the whole accounting engine.
Again, this is about fit, not a fault with Xero.
The range of alternatives
| Type | Best for | Trade-off |
|---|---|---|
| Bridging software | Keeping your spreadsheet and filing to HMRC | You maintain the spreadsheet |
| Other cloud suites (QuickBooks, FreeAgent, Sage) | Full cloud accounting | Comparable scope and cost |
| Purpose-built MTD apps | MTD compliance without the overhead | Fewer general accounting features |
How to choose
- Do you need full bookkeeping, or mainly MTD filing?
- Cloud or desktop — does keeping data on your own machine matter to you?
- Which income sources — self-employment, UK/foreign property, CIS?
- Real annual cost after stripping out unused features.
If you're an accountant, also weigh the multi-client agent workflow — see our software-for-accountants guide.
Where ThisQuarter fits
ThisQuarter is a focused MTD for Income Tax app, not a full accounting platform. It handles digital records, quarterly updates, annual adjustments, the final declaration and CIS for sole traders, landlords and accountants, as a secure desktop app with data encrypted on your own device. It can import a spreadsheet, and the Solo plan's first two quarterly cycles are free. Need full cloud accounting with invoicing and multi-currency? A suite may be right. Want MTD handled simply and privately? That's the point of a dedicated app.
Key takeaways
- Xero works for MTD — decide whether you need its full breadth.
- Alternatives: bridging, other cloud suites, purpose-built MTD apps.
- Choose on accounting needs, cloud vs desktop, income sources, and real cost.
- A dedicated MTD app suits people who want compliance without a full suite.
This article is general information, not tax advice, and mentions of other products are for comparison only. Check HMRC's compatible software list at gov.uk.
Frequently asked questions
Why look for a Xero alternative?
Usually cost, wanting something simpler than a full accounting platform, preferring a desktop or privacy-first app, or only needing MTD for Income Tax filing rather than full bookkeeping, invoicing and reporting.
Does Xero support MTD for Income Tax?
Xero is a full accounting platform that supports Making Tax Digital. It works well; the question is whether you need everything it offers, or whether a lighter, cheaper MTD-focused tool fits your situation better.
What alternatives are there to Xero?
Bridging software that keeps your spreadsheet and files to HMRC; other cloud suites such as QuickBooks, FreeAgent or Sage; and purpose-built MTD for Income Tax apps that focus on quarterly updates and the final declaration.
Which alternative is right for me?
Match it to your needs. Full bookkeeping, invoicing and multi-currency point to a suite. Simple income and expenses with MTD filing point to a focused MTD app or a bridging tool — usually simpler and cheaper.
Related reading
Best MTD Bridging Software in 2026: What to Look For
A guide to choosing MTD bridging software in 2026 — how bridging works, who it suits, the features that matter, pricing to expect, and how to keep your spreadsheet while still filing digitally to HMRC.
Best MTD Software for Landlords in 2026: What to Look For
How landlords should choose MTD software in 2026 — handling UK and foreign property, joint ownership, finance-cost relief, multiple properties, and filing quarterly updates and the final declaration to HMRC.
Best MTD Software for Accountants in 2026: What to Look For
How accountancy practices should choose MTD for Income Tax software in 2026 — multi-client workflow, Agent Services Account integration, client authorisations, bulk filing, pricing per client and data security.