In the era of HMRC’s Making Tax Digital, choosing the right MTD software is a critical decision for accountants, bookkeepers, and tax agents. With new rules requiring digital recordkeeping and quarterly submissions directly to HMRC, the right MTD software can streamline compliance, save time, and reduce costly errors. If you’re still evaluating your options, this guide will help — and we’ll also explain how FigsFlow fits into the bigger picture of digital compliance.
What Is MTD Software?
At its core, MTD software is any accounting or tax platform recognised by HMRC that allows businesses (or their agents) to maintain digital records and submit tax updates electronically. In practice, MTD software is now essential for handling Making Tax Digital requirements for VAT and soon for Income Tax Self Assessment (ITSA).
HMRCapproved MTD software must meet specific criteria, including secure digital record storage and the ability to submit quarterly updates to HMRC via an API. Only approved MTD software can ensure compliance without risking penalties for your clients.
Free and HMRCRecognised MTD Software Options
Accountants and tax pros have several MTD software choices that are either free or lowcost — especially useful if you’re onboarding clients new to Making Tax Digital.
These tools help accountants start with MTD software without upfront costs and evaluate what works best for their practice.
Why the Right MTD Software Matters
Choosing the right MTD software isn’t just about ticking a compliance box. The best platforms make it easier to:
- Store digital tax records securely
- Prepare and submit quarterly tax updates to HMRC
- Avoid penalties tied to noncompliance
- Integrate smoothly with other practice workflows
Only HMRCapproved MTD software guarantees that the digital links between records and submissions meet the Making Tax Digital standards.
How FigsFlow Complements Your MTD Software
While MTD software handles digital tax recordkeeping and HMRC submissions, FigsFlow enhances this ecosystem by helping accountants manage compliance and administrative tasks that often surround Making Tax Digital processes.
Centralised Compliance and Workflow Tools
FigsFlow isn’t MTD software itself, but it supports your practice by organising key supporting activities such as client onboarding, proposal generation, engagement letters, AML checks, and pricing — all in one place. This reduces the time you spend coordinating across multiple systems and keeps compliance workflows tightly aligned.
Enhanced Client Management
With FigsFlow, accountants can link client information and documents to their MTD software workflows, ensuring that tax compliance is part of a seamless service delivery process rather than a series of disconnected tasks.
Consistency Across Client Files
When paired with your chosen MTD software, FigsFlow helps ensure consistency in how client data and relationships are managed. That’s vital when dealing with frequent updates under Making Tax Digital regimes.
Time Saved from Manual Tasks
FigsFlow automates many of the routine elements around compliance — from templated engagement letters to customised proposals tied to digital recordkeeping requirements. This frees up time for accountants to focus on highervalue advisory work, all while maintaining compliance through solid MTD software systems.
Learn More : 9 Free HMRC-Approved MTD Software For Accountants and Tax Agents
Conclusion
As HMRC continues rolling out Making Tax Digital, the importance of using highquality MTD software will only grow. From free HMRCapproved options to robust commercial platforms, the right choice can streamline compliance and empower your practice to deliver better client outcomes.
And while MTD software covers digital tax reporting, FigsFlow helps accountants bring all peripheral compliance and client management tasks together — creating a complete, modern practice ecosystem that supports your firm’s success well beyond tax filing.
Learn More : Appointing Someone to Deal with HMRC on Your Behalf: A Complete Guide