Honest comparison - 2026TaxMTD vs
TaxMTD vs
Xero
Two capable Making Tax Digital platforms, side by side. Here is how TaxMTD and Xero compare on price, features, and UK compliance - drawn from the same matrix as our full comparison.
TaxMTD vs Xero: the short version
Xero is a global heavyweight with the largest app marketplace in accounting - over 1,000 integrations - and its UK plans start at £7/month for the very limited Simple tier, with full features arriving on Grow at around £37/month. It is a genuinely capable platform, especially if your workflow depends on third-party app connections.
TaxMTD takes a different approach. Rather than a marketplace you assemble yourself, the features UK sole traders and landlords actually need are built in and included from £12/month on Essential: AI categorisation, MTD for Income Tax and VAT, SA103/105/106/108 auto-fill, and a genuinely free Starter plan for non-VAT sole traders that Xero does not offer. Both platforms file MTD for Income Tax and VAT directly to HMRC, so the real question is fit and price.
If you want a vast integration ecosystem and are comfortable at Grow-tier pricing, Xero is strong. If you want the core UK compliance toolkit - plus Universal Credit tools no other platform has - at a lower monthly cost, TaxMTD is built for exactly that. The full feature-by-feature breakdown is below.
TaxMTD vs Xero, feature by feature
Green is included, red is missing, amber is partial or a paid extra.
Included
Not available
Partial
Paid add-on
Coming soon
Pricing & Plans
Feature
TaxMTD
Xero
Free plan available
TaxMTD Starter plan is free forever for non-VAT sole traders. Sage free for sole traders. FreeAgent free only with NatWest/RBS/Mettle bank accounts. IRIS/KashFlow has no free tier.
Sole trader from
TaxMTD: Free / £12/mo (annual) · Sage: Free / £18 · FreeAgent: £19 · Xero: £7 · QuickBooks: £12 · Crunch: Free / £24.50 · Zoho: Free / £12 · IRIS/KashFlow: £12.50
No credit card for trial
TaxMTD Starter is free forever - no card needed. Paid plans take a card to unlock the 14-day trial. IRIS/KashFlow offers a 30-day free trial.
Unlimited users on all plans
TaxMTD: 1-10 team members depending on plan (unlimited on Practice). Competitors vary.
Mid-cycle plan changes
TaxMTD supports instant plan upgrades and downgrades via Stripe with prorated billing - no waiting until next cycle
Capacity add-ons
TaxMTD lets you purchase extra entities, employees, or OCR bundles without changing plan. IRIS Elements modules are purchased separately.
Usage dashboard & limits
TaxMTD shows real-time usage vs plan limits with progress bars, warnings at 80%, and blocks at limit. Limits enforced server-side.
Bank & Payment Feeds
Feature
TaxMTD
Xero
Open Banking (any UK bank)
CSV import
PayPal integration
IRIS/KashFlow supports PayPal via bank feed only, not direct API integration
Stripe integration
Wise import
TaxMTD has built-in Wise multi-currency import
Revolut import
Duplicate / double-count detection
Bank rules / auto-matching
TaxMTD auto-learns merchant rules from AI categorisation and manual corrections
Reconciliation reports
Multi-bank dashboard
TaxMTD shows all accounts in a unified dashboard with per-bank balances. KashFlow supports multiple accounts but lacks a unified dashboard.
Manual journal entries
TaxMTD supports balanced debit/credit journal entries with post, reverse, and auto-numbering
Multi-Currency
Feature
TaxMTD
Xero
Multi-currency support
TaxMTD supports 16 currencies with live exchange rates plus Wise/Revolut import. KashFlow includes multi-currency.
Multi-currency invoicing
TaxMTD invoices can be issued in any of 16 supported currencies
Auto exchange rate fetching
TaxMTD fetches live exchange rates automatically on import and invoicing
Foreign currency bank accounts
FX gain/loss reporting
TaxMTD provides a dedicated FX gains/losses report with currency breakdown and per-transaction analysis
AI & Automation
Feature
TaxMTD
Xero
AI transaction categorisation
TaxMTD uses Gemini AI with HMRC-specific categories; Sage uses Copilot; Xero has JAX AI. IRIS Elements has AI anomaly detection; KashFlow has basic auto-categorisation.
Merchant memory / learning rules
TaxMTD learns from corrections and builds auto-rules for future imports - manageable via Expense Rules page
AI receipt OCR
FreeAgent charges £5/mo for unlimited Smart Capture; Crunch charges £5/mo for SNAP. KashFlow has receipt capture but limited OCR.
AI copilot / assistant
TaxMTD AI Assistant provides conversational access to your financial data - supports Gemini, Claude, and OpenAI
Bulk transaction processing
Invoicing & Payments
Feature
TaxMTD
Xero
Professional invoicing
Unlimited invoices
Sage free plan: 5/mo; Xero Simple: 20/mo; KashFlow Starter: 10/mo (unlimited on Business)
Estimates / quotes
TaxMTD estimates can be accepted and auto-converted to invoices
Recurring invoices
TaxMTD supports weekly/monthly/quarterly/yearly recurrence with one-click generation
Payment reminders
TaxMTD logs reminders with email provider integration ready
In-invoice payment links
TaxMTD generates Stripe Payment Links for direct invoice payment. IRIS Pay has limited payment link support.
PDF export
Credit notes
TaxMTD credit notes link to original invoices with auto-numbering (CN-XXX)
Invoice template designer
TaxMTD includes a full drag-and-drop designer with Stripe, Modern Glass, and Classic styles
Custom invoice branding
TaxMTD supports logo upload, custom fonts, colour palettes, and section reordering. KashFlow supports practice branding.
Multiple invoice templates
TaxMTD lets you create and switch between unlimited invoice templates
Branded QR codes on invoices
Unique to TaxMTD - styled QR codes (logo, colour, frame) embed payment links directly on invoices and receipts
Customer self-service portal
Magic-link sign-in. Customers see all their invoices, estimates and credit notes, accept estimates and pay outstanding invoices in one place.
Automated chase sequences
Configurable pre-due, overdue and final-notice email templates with day offsets. Auto-pauses on payment, dedupes per step, runs daily.
Expenses & Receipts
Feature
TaxMTD
Xero
Expense tracking
Receipt capture (photo/upload)
Transaction splitting
TaxMTD supports business/personal % splits per transaction
Mileage tracking
HMRC mileage rates auto-calculated
Purchase orders
TaxMTD includes full PO workflow - draft → sent → received
Bill entry & tracking
TaxMTD bills include KPIs, aging, and supplier breakdown
Recurring bills
TaxMTD auto-generates recurring bills on schedule with line item cloning
Tax & HMRC Compliance
Feature
TaxMTD
Xero
MTD for ITSA (quarterly updates)
IRIS Elements Tax is MTD for ITSA ready with direct HMRC API connections
Self Assessment (SA103)
TaxMTD auto-fills SA103 on all plans; yearly SA103S submission requires Essential (£14/mo). Sage free includes SA103S submission. Crunch charges £200 for filing. IRIS requires Elements Tax module (from £10/mo).
SA102 (employment income)
TaxMTD auto-fills employment income from PAYE data. IRIS via Elements Tax.
SA105 (property income)
TaxMTD supports UK property income with automatic expense allocation. IRIS via Elements Tax.
SA106 (foreign income)
TaxMTD covers foreign income, double taxation relief, and foreign tax paid. IRIS via Elements Tax.
SA108 (capital gains)
TaxMTD auto-calculates CGT with annual exemption allowance. IRIS via Elements Tax.
Direct HMRC submission
VAT returns
TaxMTD includes full 9-box VAT return with standard and flat rate scheme support
VAT Flat Rate Scheme
TaxMTD supports FRS with automatic rate application
VAT reverse charge
TaxMTD includes full CIS reverse charge with self-accounting, VAT return integration, and compliance guide. KashFlow is CIS Domestic Reverse Charge compliant.
Corporation Tax (CT600)
TaxMTD includes full CT600 with complete tax calculation chain (Boxes 165→528), R&D/creative relief section (CT600L), all 17 supplementary page checkboxes, capital allowances (AIA, WDA, full expensing), loss relief, marginal relief, straddling period support, and iXBRL tagging. FreeAgent includes CT600 for limited companies. IRIS via Elements Accounts Production (from £4/mo).
Capital allowances (AIA)
TaxMTD auto-calculates AIA via the fixed asset register. IRIS via Elements Tax.
CIS returns
TaxMTD includes subcontractor management, CIS300 returns, and deduction calculations. IRIS via Elements Tax.
Real-time tax forecast
TaxMTD shows live income tax, NI, and payment-on-account estimates
Tax year progress tracker
Unique to TaxMTD - visual progress bar showing where you are in the tax year
Companies House filing
TaxMTD supports CS01, AD01, AP01/TM01 filings with deadline tracking. IRIS via Elements Company Secretarial (from £6.45/client).
Annual accounts (iXBRL)
TaxMTD generates iXBRL-ready accounts with P&L, balance sheet, auto-fill from reports, and print preview. IRIS via Elements Accounts Production (from £4/mo) with FRC taxonomy.
CT600A - Loans to participators (S455)
TaxMTD includes the CT600A supplementary page with S455 loan-to-participator tax (33.75%) and 9-month repayment relief tracking. Only IRIS Elements Tax matches.
CT600C - Group/consortium relief
TaxMTD includes CT600C group relief claims and surrenders, with linked-company schedules. Only IRIS Elements Tax matches.
CT600L - R&D and creative tax relief
TaxMTD includes the CT600L supplementary page for R&D expenditure credit (RDEC), SME R&D relief, and creative-industry tax credits.
Capital allowance pools (main / special / single)
TaxMTD tracks main pool, special-rate pool, and single-asset pools with WDA and balancing adjustments per pool.
Loss carry-forward history
TaxMTD records prior-period trading losses and applies brought-forward relief automatically against current profits.
HICBC auto-calculation
Unique to TaxMTD on cloud platforms - auto-calculates the High Income Child Benefit Charge based on adjusted net income.
Ring-fence profits (oil & gas)
TaxMTD supports the ring-fence corporation tax regime for oil and gas extraction profits.
Transfer pricing
TaxMTD includes transfer pricing tracking for related-party transactions and arm’s-length adjustments.
Controlled Foreign Company (CFC) rules
TaxMTD supports CFC charge calculations for UK groups with overseas subsidiaries.
Universal Credit
Feature
TaxMTD
Xero
UC payment calculator
Unique to TaxMTD - calculates UC based on MIF, work allowance, and 55% taper
UC Optimiser
Suggests expense timing to maximise UC payments
UC Auto-Filler (Chrome extension)
Auto-fills the gov.uk UC portal with your income & expenses via Chrome extension + WebSocket bridge
UC history & assessment periods
UC period filtering
Filter dashboard by UC assessment period for accurate income/expense tracking
UC statement OCR
Upload UC payment screenshots - AI extracts all figures automatically
Reports & Analytics
Feature
TaxMTD
Xero
Profit & Loss
Balance Sheet
Cash flow forecast
TaxMTD projects cash flow for 3/6/12 months with bar chart and cumulative balance
Trial balance
TaxMTD includes a full double-entry trial balance with period comparison and account grouping
Aged debtors / creditors
TaxMTD groups by aging bucket (current, 30, 60, 90+ days) with colour severity
Budgeting & forecasting
TaxMTD includes budget vs actual tracking with progress bars and overspend alerts
Project profitability
TaxMTD shows revenue, hours, rate, and profit per project with budget tracking
Custom report builder
TaxMTD includes a report builder with custom columns, filters, grouping, sorting, and CSV export
General ledger report
TaxMTD includes a full general ledger with per-account drill-down, running balances, and search/filter
VAT summary report
TaxMTD generates VAT summary from the VAT return history
PDF report export
Time & Projects
Feature
TaxMTD
Xero
Time tracking
Built into TaxMTD Pro; Xero/QuickBooks charge extra. Neither KashFlow nor IRIS Elements includes time tracking.
Project tracking
Billable hours → invoices
TaxMTD converts tracked time entries into invoice line items grouped by project with hourly rates
Project profitability report
TaxMTD shows revenue, hours, rate, and profit per project with budget tracking
Project budgets
TaxMTD shows % budget used per project with visual progress bars
Timing app import
Unique to TaxMTD - import time entries from macOS Timing app via Web API or CSV file export with automatic project mapping and deduplication
Payroll & HR
Feature
TaxMTD
Xero
Payroll
TaxMTD includes full payroll with PAYE calculations, payslips, P60, pension auto-enrolment, and RTI submission. KashFlow includes payroll for up to 5 employees.
PAYE submissions
TaxMTD calculates PAYE, NI, student loan deductions per payslip with YTD tracking. KashFlow payroll limited to 5 employees.
RTI FPS/EPS submissions
TaxMTD generates RTI Full Payment Submission data and submits via MTD. KashFlow payroll limited to 5 employees.
Payslip generation
TaxMTD generates detailed payslips with earnings, deductions, YTD totals, and print support. KashFlow payroll limited to 5 employees.
P45/P60 production
TaxMTD includes full P45 leaver flow (Parts 1/1a/2/3 with auto RTI leaver indicator) and P60 year-end summary. KashFlow payroll limited to 5 employees.
P11D - Benefits in Kind
TaxMTD includes full P11D benefits tracking across 13 HMRC categories (cars, medical, loans, etc.) with automatic Class 1A NIC calculation at 13.8% and per-employee summary for P11D(b) return. IRIS via Elements Payroll.
Pension auto-enrolment
TaxMTD assesses eligible employees, calculates contributions, manages scheme settings with compliance guide
Director salary optimisation
Unique to TaxMTD Business plan - optimises director salary vs dividends
Dividend tracking
TaxMTD includes dividend vouchers, tax year grouping, and estimated tax calculation
Shareholder management
TaxMTD includes a full shareholder register with share classes, ownership %, voting rights, and nominal values
Director's loan account
TaxMTD tracks DLA with running balance, S455 tax calculation, and transaction categorisation
Contacts & CRM
Feature
TaxMTD
Xero
Customer database
TaxMTD includes customer/supplier/both contact types with company and address tracking
Supplier database
Contact search & filtering
TaxMTD supports debounced search and type filtering (customer/supplier/both)
Customer statements
TaxMTD generates PDF customer statements with invoice history and balance outstanding
Contact activity history
TaxMTD shows a timeline of all invoices, bills, and estimates per contact with totals
Inventory & Stock
Feature
TaxMTD
Xero
Basic stock tracking
TaxMTD includes products, stock movements, and cost/retail value tracking. KashFlow includes stock control.
Low stock alerts
Stock valuation
TaxMTD tracks cost and retail value per product with stock movement history
Product categories
Multi-location warehouse
Full warehouse management with per-location stock levels, reorder points, and dashboard
Transfer orders
Move stock between warehouses with draft/ship/complete workflow
Stock takes
Physical inventory counting with automatic variance adjustment
Per-warehouse reorder points
Set low-stock alerts per product per warehouse location
Stock valuation report
Weighted average valuation by warehouse, product, or category
Movement audit trail
Full history with filtering by warehouse, type, and date range
Barcode scanning
Store and look up products by EAN/UPC barcode
Platform & Integrations
Feature
TaxMTD
Xero
Native mobile & desktop apps
TaxMTD native apps for iOS, Android, macOS, and Windows are in development - currently accessible via responsive web. KashFlow has a mobile app.
API access
TaxMTD provides a public REST API with API key authentication for transactions, invoices, contacts, and more
App marketplace / add-ons
TaxMTD marketplace with 12+ integrations including Stripe, PayPal, Amazon, Shopify, WooCommerce, GoCardless, Square. IRIS Elements is modular - each product is a separate purchase.
Accountant / Practice portal
TaxMTD Practice portal - firm dashboard, multi-client KPIs, upcoming HMRC deadlines, one-click switch into any client book. Included on Practice plan. IRIS Elements Practice Management from £27.20/user/mo.
Multi-user roles & permissions
TaxMTD supports Administrator, User, Accountant, and Viewer roles with team management, email invitations, and per-entity permissions. KashFlow Business plan includes multi-user.
Multi-entity / multi-business
TaxMTD includes 1-25 entities depending on plan, with extra entity add-ons available (5 entities for £5/mo)
Fixed asset register
TaxMTD tracks depreciation, disposal, and category breakdown with AIA support. IRIS via Elements Tax module.
Two-factor authentication
TaxMTD supports TOTP (authenticator app) and email OTP - both methods can be enabled simultaneously
Import from other platforms
TaxMTD imports contacts, products, invoices, and subscriptions from 14 platforms via API or CSV - FreeAgent, Stripe, Shopify, WooCommerce, Xero, QuickBooks, Sage, and more
FreeAgent integration
TaxMTD connects to FreeAgent via OAuth and imports contacts, invoices, bills, expenses, projects, and time entries - one-click migration for accountants
Stripe customer/product sync
Import Stripe customers, products, invoices, and subscriptions into your accounting data - no manual re-entry
Data export (CSV/PDF)
Audit trail / activity log
TaxMTD logs all mutations across 69+ endpoints with filterable audit trail viewer in settings
Blog / Knowledge base
TaxMTD blog covers HMRC law changes, tax guides, IT security, and economics with SEO-optimised internal linking to documentation
Background job queue with progress
TaxMTD runs long imports (Stripe, Amazon, FreeAgent, OCR batches) in the background with live progress, stalled-job recovery, and per-job logs.
Departments / cost centres
Tag transactions, invoices and bills by department. P&L breaks down income, expense and net profit per cost centre.
Group accounting / consolidation
Set parent / subsidiary relationships across entities and run a consolidated P&L scaled by ownership percentage.
Data Retention & Privacy
Feature
TaxMTD
Xero
Post-cancellation data retention
TaxMTD: 7 years (HMRC compliant). Sage: 6 months. FreeAgent: 1 year. QuickBooks: 12 months. Zoho: 120 days. IRIS/KashFlow: varies by product.
Read-only access after cancellation
Account reactivation
TaxMTD: anytime within 7 years. FreeAgent: within 1 year. QuickBooks: within 12 months. Sage: within 6 months. Zoho: within 120 days.
GDPR data export (Article 20)
GDPR right to erasure (Article 17)
Financial records retained under legal obligation (HMRC). Personal data anonymised on request.
HMRC-compliant record keeping (6+ years)
HMRC requires 5-7 years. Most competitors delete data well before this period.
30-day deletion grace period
Undo account deletion within 30 days with all data intact.
Two-factor authentication
Audit trail
End-to-end encryption
E-commerce & Industry
Feature
TaxMTD
Xero
Amazon seller integration
TaxMTD imports Amazon Seller Central orders, fees, refunds, and FBA settlements with profit/loss per product
Amazon buyer integration
Unique to TaxMTD - imports Amazon purchase history, matches items to bank transactions, and auto-categorises business purchases vs personal
FBA settlement reconciliation
TaxMTD auto-matches Amazon settlement payouts to bank credits and tracks per-settlement P&L
Amazon fees breakdown
Unique to TaxMTD - imports referral fees, FBA fees, advertising fees, and fee adjustments as categorised expenses
Per-product profit/loss
Unique to TaxMTD - combines sale price, Amazon fees, cost price, and refunds to show profit per ASIN
Shopify integration
TaxMTD syncs Shopify orders, products, and payments with automatic transaction creation
WooCommerce integration
TaxMTD imports WooCommerce orders via REST API with consumer key authentication
GoCardless Direct Debit
TaxMTD imports GoCardless mandates and payment collections
Square POS integration
TaxMTD syncs Square POS transactions and inventory
TaxMTD vs Xero FAQ
See how TaxMTD compares for yourself
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