Choosing Accounting Software for Making Tax Digital (MTDfIT): What Musicians Need to Look Out For

A practical checklist for self-employed musicians preparing for MTD

As HMRC rolls out Making Tax Digital for Income Tax (MTDfIT), choosing the right software has become one of the most important decisions a self-employed musician can make.

But with every provider promising the world and plenty of shiny intro offers, how do you know what actually matters?

Below is a clear set of key questions to consider when assessing any MTD-compatible software. This blog isn’t here to give you the answers (yet!); it’s to make sure you know what to ask before committing to a tool that will handle your day-to-day business admin.

We’ll also be putting these questions directly to the software vendors we speak with and publishing their answers on our Resource Hub, so keep an eye out.

Why Choosing the Right Software Matters

Selecting the right software is crucial for self-employed musicians. It can streamline your financial processes and save you time. With the right tools, you can focus on what you love—making music.

1. Can you connect multiple bank accounts, or just one?

For many musicians, income and expenses flow through several accounts: personal, business, savings, or international. Some software only supports one bank connection, which might not be enough depending on how your finances are structured.

2. Does the software allow bulk categorisation of transactions?

High-volume accounts need efficient tools. Bulk categorisation (similar to Xero’s Cash Coding) can save hours, especially if you’re juggling gigs, touring expenses, and repeat-pattern transactions.

3. Can you tailor the Chart of Accounts to suit how you work?

Musicians often need bespoke categories; you might not want a Cost of Sales section, but you might want a specific category for “West End deputies paid.” Flexibility matters.

4. What support options are available?

Is support live chat only? A bot? Email? Real humans? And what’s the typical response time? When you’re mid-deadline, accessible support can make or break the experience.

5. Can you safely invite your accountant or another user?

You should never have to share your login. Proper multi-user access is essential for working with an accountant or bookkeeper securely.

6. What is the real monthly cost, after the intro period?

Intro offers can be shiny, but you’ll want to know what it’ll cost you as a non-VAT-registered sole trader once the razzle-dazzle pricing expires.

7. Will the software handle both Quarterly Updates and your Final Declaration?

Some tools can submit quarterly updates but may not support the full end-of-year process. MTD-ITSA requires both - so check before you commit.

8. Does it offer reporting on sub-categories, projects or income sources?

If you want to track how much work you're doing with a particular fixer, for a show, ensemble, or client, you’ll want software that supports tracking categories (like Xero Tracking).

9. Can it handle land & property income or multiple trades?

Especially relevant if you’re a musician who also earns rental income or operates separate trades within your business. Not all software accommodates these structures cleanly.

10. Can you set up bank rules (including split-rules)?

For things like splitting mobile phone or broadband costs, rules can automate recurring adjustments and keep your data clean throughout the year.

Next steps: Stay tuned for the vendor comparisons for Making Tax Digital software options

We’re putting these exact questions to all the software providers we speak to and gathering the answers in one central place on our Making Tax Digital Resource Hub.

If you want to make sure you never miss an update, sign up to our Tax Tips Newsletter.

Conclusion: Make Informed Decisions

In conclusion, choosing the right MTD-compatible software is essential for self-employed musicians. By asking the right questions, you can find a tool that meets your unique needs. Remember, your time is valuable. Investing in the right software can help you manage your finances better, allowing you to focus on your music.

Stay informed and make the best choice for your business.