Zoho Books for Making Tax Digital Review: Features & Pricing

Zoho Books is a cloud-based accounting platform designed for freelancers, sole traders, and small businesses that want to manage their finances digitally while staying compliant with UK tax rules.

With the launch of MTD for Income Tax in April 2026, tools like Zoho Books are becoming increasingly relevant for everyday financial management.

In this review of Zoho Books for MTD, we’ll break down how it actually performs and what some limitations are for UK users.

Key points

• Zoho Books is a strong all-in-one MTD option, but not fully hands-off ⚙️
  It combines invoicing, expense tracking, reporting, and MTD submissions in one platform, making it suitable for UK freelancers and small businesses. However, it still relies on user setup, categorisation, and ongoing review to keep data accurate.
• Automation and insights improve over time, but depend heavily on setup 🧩
  Features like bank feeds, tagging, and workflow rules can significantly reduce admin, but only after the initial configuration. If categories and rules are inconsistent, reporting and automation lose accuracy.
• Reporting is flexible, but only as good as your data 📊
  Zoho Books allows detailed reporting through tags, projects, and filters, which is powerful for tracking performance. The downside is that poor or inconsistent tagging directly reduces the reliability of insights.
• MTD compliance is fully integrated ✅
  The platform supports both VAT and Income Tax Self Assessment submissions directly to HMRC, meaning users do not need bridging software. This makes it a solid compliance-ready option for UK businesses moving into MTD for ITSA.
• If you want more automation, ANNA reduces bookkeeping to near-zero 🚀
  While Zoho Books requires ongoing financial management, ANNA is designed to run bookkeeping, tax calculation, and MTD submissions in the background with minimal input, making it better suited to users who want to reduce day-to-day admin rather than manage it.

Zoho Books for MTD: A review of key features

In 2026, Zoho Books positions itself as an affordable, flexible alternative to more traditional accounting software. It combines bookkeeping, invoicing, automation, and tax submission into one system, with built-in support for both MTD for VAT and MTD for Income Tax.

Here’s how the main features work in practice:

Invoicing and payments

Zoho Books puts a strong emphasis on invoicing as a core workflow, with features designed not just for sending invoices, but for managing the full client billing cycle.

This includes client communication, approvals, and payment tracking – all built around the client portal and customisation options.

What’s useful here:

• Invoice templates can be deeply customised, including branding, custom fields, and client-specific details, which is useful if you work with different pricing structures
• Built-in client portal lets customers view invoices, approve estimates, and track their own transactions in one place
• Automatic payment reminders and multi-currency support make it easier to manage international clients

What to be aware of:

• Some advanced invoice customisation options take time to set up properly
• Payment integrations vary by region, so not all gateways are equally seamless for UK users
• Matching incoming payments to invoices isn’t always fully automatic, especially with mixed or partial payments

Expense tracking and bank feeds

Expense tracking in Zoho Books is built around automation, but it relies heavily on rules, tagging, and user-defined logic. The system becomes more efficient as you use it, but only after you’ve set up how transactions should be handled.

Over time, as you create rules and categorisation patterns, Zoho Books can significantly reduce repetitive admin. However, getting to that point requires some upfront effort and ongoing oversight, especially if your transactions aren’t consistent.

What works well:

• Bank feeds integrate with a wide range of UK banks, and transaction imports are generally reliable and frequent
• Zoho’s categorisation improves using rules and past behaviour, which helps reduce repetitive decisions
• Receipt scanning links directly to transactions, keeping audit trails organised for HMRC requirements

Where there is still work:

• Initial setup of bank rules and categories can take time before automation becomes accurate
• Suggested categories can be inconsistent early on, especially for mixed-use expenses
• You’ll need to regularly review flagged or uncategorised transactions to keep reports clean

Reporting and dashboards

Reporting in Zoho Books is designed to be flexible rather than strictly standardised. While it includes all the core financial reports you’d expect, much of its real value comes from how you structure your data – particularly through tags, projects, and custom filters.

This gives you more control over how performance is tracked, but also means the quality of your insights depends heavily on how consistently you organise your records from the start.

Why this matters:

• Reports can be tailored granularly, including filters for projects, tags, or specific income streams
• Tag-based reporting is particularly useful if you want to track performance across different areas without complex accounting structures
• The dashboard gives a clear, real-time snapshot of receivables, payables, and cash position

Limitations to consider:

• More advanced reporting (like detailed cash flow forecasting) is only available on higher-tier plans
• Reports rely heavily on consistent tagging and categorisation, which adds setup overhead
• Custom report building isn’t as intuitive for users without prior accounting experience

MTD compliance

Zoho Books is fully MTD-compliant, allowing users to maintain digital records and submit returns directly to HMRC.

For VAT, returns can be filed within the platform. For Income Tax, users can submit quarterly updates, end-of-period statements, and final declarations as required under MTD for ITSA.

In practice, this means:

• No need for bridging software
• Direct HMRC submissions
• Built-in support for evolving MTD rules

Integrations and ecosystem

Zoho Books integrates with a wide range of tools, including payment platforms, Customer Relationship Management (CRM) systems, and e-commerce solutions.

It also connects with other Zoho apps, creating a broader ecosystem for managing business operations.

Why this is valuable:

• Native integration with the wider Zoho ecosystem (like Zoho CRM and Zoho Inventory) allows for a more connected business setup
• API access and app marketplace give flexibility to extend functionality beyond core accounting
• Useful for businesses already using Zoho tools, as data flows more seamlessly between systems

Potential downsides:

• Full value often depends on using multiple Zoho products, which can increase complexity
• Some third-party integrations require manual configuration rather than plug-and-play setup
• Switching between Zoho apps can make workflows feel less centralised than all-in-one tools

Mobile app

The Zoho Books mobile app is designed to replicate core accounting tasks rather than just offer a lightweight companion. It gives you access to most day-to-day workflows – like invoicing, expense tracking, and client updates – but the experience depends on how comfortably you can navigate a feature-heavy interface on a smaller screen.

It’s useful for staying responsive, though not everything translates equally well from desktop.

What works well:

• The app mirrors much of the desktop functionality
• Push notifications for overdue invoices and activity updates help you stay on top of cash flow
• Mileage tracking and on-the-go expense logging are useful for mobile-heavy work

Limitations:

• Navigation can feel slightly cluttered due to the number of available features
• Some workflows (like detailed reporting or bulk edits) are still better handled on desktop
• Sync delays can occasionally happen when working across multiple devices

Automation and workflows

Automation in Zoho Books is built around custom workflow rules rather than default, hands-off processes. Instead of the system automatically managing everything, you define the logic – setting triggers, conditions, and actions that shape how tasks are handled.

This makes it highly flexible, especially within the wider Zoho ecosystem, but it also means automation only works as well as the rules you put in place.

What to expect:

• Workflow automation can trigger actions like sending emails, updating fields, or assigning tasks based on specific conditions
• Custom rules allow you to automate repetitive processes, such as categorising recurring expenses or following up on invoices
• Automation ties in well with other Zoho apps if you’re using the broader system

What it doesn’t fully do:

• Automation requires manual setup and ongoing refinement to stay accurate
• It doesn’t fully eliminate the need to review financial data before submission
• Complex workflows can become difficult to manage without prior experience

Zoho Books pricing

Zoho Books uses a tiered pricing model, with a free plan available for very small businesses and multiple paid tiers that unlock more advanced features, users, and automation.

Pricing is relatively competitive compared to other UK accounting tools, but the real cost depends on how much functionality you need as your business grows.

Here’s how the structure works:

1. Free: £0

Zoho Books offers a genuinely usable free plan for businesses below the VAT threshold, making it one of the few accounting tools in the UK with a long-term free option.

It typically includes:

• Invoicing and expense tracking
• Bank feeds and reconciliation
• VAT tracking (but limited filing capabilities depending on setup)
• Basic financial reporting

This works well for sole traders with simple finances, but it has limitations regarding users, automation, and advanced features.

2. Standard: £12–£16

This is the first paid tier and introduces more structure for day-to-day bookkeeping.

It includes:

• Everything in the Free plan
• MTD for VAT submission support
• Workflow rules (basic automation)
• Additional users

This is usually the minimum you need for full MTD functionality and more control over processes.

3. Professional: £20–£25

This plan is designed for businesses that have, or expect to soon have, more complicated finances.

It includes:

• Project and job tracking
• Timesheets and billable hours
• Inventory tracking
• Multi-currency support

It’s particularly useful if you need to track profitability across clients or manage stock alongside accounting.

4. Premium: £25–£30

This tier focuses on deeper financial visibility and automation.

It includes:

• Advanced reporting capabilities
• Budgeting and cash flow forecasting
• More advanced workflow automation
• Increased user limits

At this level, Zoho Books starts to feel more like a financial management system rather than basic bookkeeping software.

5. Elite and Ultimate: £80–£160+

These higher-tier plans are aimed at more established or operationally complex businesses.

They include:

• Advanced inventory control (including warehouse management in Elite)
• Business intelligence and analytics dashboards (Ultimate)
• Greater customisation and automation depth

Costs may increase further depending on the number of users, integrations, and additional Zoho products.

Keep in mind that:

• The free plan is limited to businesses under the VAT threshold, so most VAT-registered businesses will need a paid tier
• Key MTD features and automation tools are only fully available from paid plans upwards
• Costs can increase as you add users, automation, or integrate other Zoho apps

Zoho Books pros & cons

Beyond the core features, there are a few broader pros and cons that become clearer with day-to-day use of Zoho Books.

Pros:

• Strong audit trail and change tracking make it easier to review edits and maintain transparency across financial records
• Built-in document management system allows you to attach and store receipts, contracts, and supporting files directly within transactions
• Strong multi-user permission controls let you define exactly what different team members can view or edit

Cons:

• Setup can feel time-intensive at the beginning, especially when configuring tax settings, workflows, and integrations properly
• Interface can feel feature-dense, which may slow down navigation for users who only need basic bookkeeping functions
• Some advanced features are split across different menus and modules, which can make it more difficult to quickly find specific tools

If you want a simpler, free MTD for ITSA solution, try ANNA

If Zoho Books still feels like something you need to actively manage, ANNA takes a more automated approach to MTD.

Instead of giving you accounting tools to maintain and configure, it focuses on removing bookkeeping from your day-to-day entirely, handling core financial processes in the background.

Everything from income tracking to MTD reporting is handled automatically, with minimal input required after setup.

And for users getting started with MTD for ITSA, ANNA also offers a simple onboarding path – including a free Self Assessment filing for your first year, plus a full refund of the filing fee if you’re switching from another provider.

Here’s what that looks like in practice:

• Self Assessment made simple: Your financial data is already organised and pre-processed, so Self Assessment filing is generated directly from your activity.
• No manual bookkeeping: Transactions are automatically captured, matched, and categorised in real time, reducing the need to constantly review or tidy up records.
• Continuous tax calculation: Your tax position updates instantly as income and expenses flow through the account, giving you an always-up-to-date view of what you owe.
• End-to-end MTD handling: VAT and Income Tax obligations are managed directly within the platform.
• Integrated business account: Your account, payments, and bookkeeping are connected, so financial activity is recorded at the source.
• Built-in invoicing and payment tracking: You can create, send, and monitor invoices directly within the same system where you manage your finances.
• Built-in tax pots: A portion of your income can be automatically set aside into dedicated tax pots, helping you separate tax money from day-to-day cash flow.
• 24/7 support access: Round-the-clock support helps resolve issues quickly, reducing downtime or delays when managing finances.

Sign up with ANNA today to simplify your MTD compliance.