Is Wave MTD Compliant? Alternatives for UK Businesses in 2026
From 6 April 2026, Making Tax Digital for Income Tax starts for people with over £50,000 in combined self-employment and property income, based on the relevant tax year HMRC uses to assess qualifying income. That shift brings a clear change in routine. You must keep digital records and send quarterly updates using HMRC-recognised software.
If you currently use Wave for day-to-day bookkeeping, it is worth checking whether it can support those MTD submissions.
What Is Wave?
Wave is a cloud-based accounting software designed mainly for freelancers, sole traders and very small businesses. It lets you record income and expenses, create and send invoices, and review simple financial reports from a single dashboard.
Why Small Businesses Chose Wave
Many small businesses use it because the core bookkeeping tools are free, and the interface is easy to understand.
- First, the software is easy to learn. Even if you are not an accountant, you can easily record transactions and generate a report.
- Second, the platform provides useful invoicing tools. You can create and send invoices quickly, which helps small businesses keep their cash flow organised.
- Third, the system offers basic reporting. It allows you to review income, expenses and profit without relying on complex spreadsheets.
Is Wave MTD Compliant for UK Tax Reporting?
Wave is not currently MTD compliant for UK tax reporting. It does not provide direct MTD submissions. Since MTD requires a digital link between your records and HMRC, relying solely on Wave will leave you non-compliant. You have two choices. You can either migrate your entire business to new accounting software or use bridging software.
MTD Compliant Alternatives to Wave
If you are looking for a Wave MTD compliant solution, several accounting software platforms support digital submissions to HMRC.
Xero
Xero is a massive name in cloud accounting. It features built-in MTD filing, live bank feeds, and smart tax automation tools to speed up your daily admin. It does a fantastic job of keeping records accurate, but you must pay a monthly subscription to access it.
QuickBooks Online
This platform offers standard bookkeeping alongside direct HMRC integration for MTD. It suits growing businesses that need more detailed features and custom reports. Just like Xero, it runs on a paid plan that you renew every month.
FreeAgent
Built heavily with freelancers and contractors in mind, FreeAgent includes MTD filing support and built-in tax tools. It actively estimates your upcoming tax bill as you earn your money. It operates as a paid subscription, though certain business bank accounts offer it to their customers for free.
Sage
Sage provides accounting software for businesses of all shapes and sizes. It fully supports MTD compliance and packs in payroll add-ons and detailed reporting tools. Again, this is a premium paid platform that adds to your monthly business costs.
Why Acxite Is the Best Wave Alternative
If your main goal is to stay compliant without paying for a full accounting subscription, Acxite offers a practical alternative.
Acxite is MTD bridging software. Instead of replacing your entire bookkeeping system, it connects your digital records to HMRC, allowing you to submit the required updates.
HMRC Recognised Software
Acxite is HMRC-recognised Making Tax Digital compliance. It allows you to submit your required quarterly updates legally and securely. It connects directly to the government gateway, so you never have to leave the platform to file your taxes.
Works Alongside Your Existing Records
Many business owners already track their income in spreadsheets and do not want to change their habits. Acxite works perfectly as MTD bridging software. Upload your custom spreadsheet, map your columns to the required HMRC fields, and submit your return effortlessly.
Advanced Tax Automation
MTD means reporting four times a year instead of once. To help you from drowning in paperwork, Acxite uses AI and OCR to extract data from your bills, invoices, and bank statements. Even if you upload a photo of a crumpled receipt via email, Dropbox, or Zapier, Acxite reads it and drops the data into a clear grid, reducing your manual workload.
Final Thoughts
From April 2026, sole traders and landlords with qualifying income above the threshold must submit updates through MTD-compliant software. Wave does not support direct MTD submissions, so businesses using it will need an alternative.
If you want to keep your existing records and avoid switching accounting systems. You can use Acxite. It connects your records to HMRC and allows you to submit digital updates in line with MTD rules.
Frequently Asked Questions
Is Wave MTD Compliant?
No. Wave does not support direct digital tax submissions required under the UK’s Making Tax Digital rules. If you use Wave for bookkeeping, you will need another tool to send your returns.
How much does MTD compliant software cost?
The price depends on the type of software. Full accounting platforms such as Xero, QuickBooks Online and FreeAgent charge monthly subscription fees because they include bookkeeping, reporting and tax filing in one system.
If you only need to submit returns, bridging software can be a more practical option. Acxite is HMRC-recognised bridging software that lets you send your file returns for free.