Sage for sole traders: is it a good fit for MTD?
Last updated: 18 October 2026. Prices checked October 2026.
Sage for sole traders comes in a free version and a paid version, both designed for Making Tax Digital for Income Tax. This guide explains what each one includes, what they cost, and who they suit, so you can decide whether Sage is worth adding to your shortlist. We have not been paid by Sage for this article.
Key takeaways
- Sage Sole Trader Free costs £0 and is described by Sage as HMRC-recognised and MTD ready.
- The free plan has limits: one bank account, 25 auto-categorised transactions and 5 invoices a month.
- The paid Sole Trader plan is £7 a month plus VAT, after an introductory discount.
- Both are for sole traders who are not VAT registered. VAT-registered businesses need Sage Accounting instead.
Sage for sole traders: the plans compared
| Sole Trader Free | Sole Trader (paid) | |
|---|---|---|
| Price | £0 | 90% off for 6 months, then £7/month + VAT |
| Users | 1 | 1 |
| Bank accounts | 1 | Multiple |
| Auto-categorised transactions | 25 | Unlimited |
| Sales invoices | 5 a month | Unlimited |
| Receipts | Manual entry | Snap and scan in the app |
| CIS (construction) | Not listed | Included |
| Contract | None | None, cancel any time |
Source: Sage's own pricing page, checked October 2026. Prices and offers change, so confirm on Sage's website before you sign up.
What Sage does for MTD
Sage's sole trader software is built for the full MTD routine: keeping digital records, sending quarterly updates to HMRC, and recording landlord income and expenses alongside your business. It links to your bank so transactions can flow in automatically, which is where most of the time saving comes from.
Who Sage Sole Trader suits
- Simple, non-VAT sole traders with one bank account and a handful of invoices: the free plan may be all you need.
- Busier sole traders who invoice often, have several bank accounts or lots of receipts: the paid plan removes the limits for a modest monthly fee.
- Construction subcontractors who deal with CIS: the paid plan includes CIS.
- People who want a well-known UK brand with 24/7 product support (free plan) or human webchat (paid plan).
Who should look elsewhere
- VAT-registered businesses: the sole trader plans do not handle VAT. Sage points these customers to its Sage Accounting plans, which start at £20 a month plus VAT after an introductory offer.
- Spreadsheet lovers: if you are happy with your spreadsheet, bridging software may be simpler and cheaper.
- Anyone whose accountant uses a different product: sharing one system with your accountant usually saves money and hassle.
Is the free plan really enough?
For some people, yes. The limit to watch is 25 auto-categorised transactions. If your business bank account has more than that each month, you will be categorising the rest by hand, or you will want the paid plan. The 5 invoices a month limit matters if you bill lots of small jobs.
A sensible approach: start on the free plan a few months before your MTD start date, see how many transactions you really have, and upgrade only if the limits get in the way.
Alternatives to compare
Sage is one of many products on HMRC's list of recognised software, and HMRC does not recommend any brand. Before deciding, compare two or three options using HMRC's software finder, and read our guide to MTD software options.
What to do now
- Check whether you are VAT registered. If yes, look at Sage Accounting rather than the sole trader plans.
- Count your monthly bank transactions and invoices to see if the free plan limits fit.
- Try the plan that fits with real transactions before your MTD start date.
- Compare with at least one alternative from HMRC's software finder.
Frequently asked questions
Is Sage free for sole traders?
Sage offers Sage Sole Trader Free at £0 for non-VAT-registered sole traders. It has limits, including one bank account, 25 auto-categorised transactions and 5 invoices a month.
Is Sage recognised by HMRC for MTD?
Sage describes its sole trader software as HMRC-recognised and Making Tax Digital ready. You can also check any product on HMRC's software finder on GOV.UK.
How much does Sage Sole Trader cost?
The paid plan is £7 a month plus VAT after an introductory offer of 90% off for six months, as of October 2026. Check Sage's website for current prices.
Can I use Sage Sole Trader if I am VAT registered?
No. The sole trader plans do not support VAT. Sage suggests its Sage Accounting plans for VAT-registered businesses.
Can Sage handle rental income?
Yes. Sage says its sole trader software lets you record landlord income and expenses as well as self-employment income.
Sources
- Sage: MTD software for sole traders (pricing and plan limits)
- Sage: Sage Accounting pricing
- GOV.UK: Choose the right software for MTD for Income Tax
This article is general information, not financial or tax advice. Prices and features were checked on Sage's website in October 2026 and may change.
