Xero vs QuickBooks vs FreeAgent

Last checked: 7 November 2026. Prices are per month and exclude VAT unless we say otherwise. All three providers change prices and offers often, so confirm on their sites before you sign up.

Xero, QuickBooks and FreeAgent are the three names most UK small businesses shortlist, and the ones most accountants are happy to work with. All three connect to your bank, send invoices, handle VAT and are ready for Making Tax Digital for Income Tax. The differences are in what’s included in the price, how they handle payroll and year-end tax, and who each one is really built for.

This guide compares them on what you’ll actually pay as a sole trader or a small limited company, then helps you pick in a couple of minutes. If you’re a sole trader and want to see the free and budget options too, read our best accounting software for UK sole traders guide.

Disclosure: we don’t currently earn commission from Xero, QuickBooks or FreeAgent. If that changes, we’ll say so here. How we review.

The quick verdict

• FreeAgent: best for freelancers, contractors and one-person limited companies. One price includes unlimited payroll, Self Assessment and, on the limited company plan, Corporation Tax and micro-entity final accounts filing. It’s free if you bank with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle.
• Xero: best for growing businesses that work with an accountant. The widest app marketplace, strong bank reconciliation and plans that scale up to multi-currency, budgets and projects.
• QuickBooks: best for admin on the go and product-based businesses. A strong mobile app with mileage and receipt capture, and inventory on the Plus plan. Large introductory discounts, but payroll costs extra.

At a glance

	FreeAgent	Xero	QuickBooks
Plans	Sole Trader £19; Partnership/LLP £27; Limited Company £33	Simple £7 (not VAT registered); Ignite £18; Grow £39; Comprehensive £55; Ultimate £70	Sole Trader Plus £10; Simple Start £18; Essentials £40; Plus £60; Advanced £128
Current intro offer	50% off for 6 months	90% off for 6 months (new customers)	90% off for 6 months (new customers)
Free option	Yes, with a NatWest, RBS, Ulster Bank or Mettle account	No (free trial)	No (free trial)
Payroll	Included, unlimited employees	Grow includes 1 person, Comprehensive 5; extra people £1.50 each	Paid add-on on every plan
Making Tax Digital for Income Tax	Yes	Yes	Yes
VAT returns	Yes, all plans	Yes, from Ignite (not on Simple)	Yes, from Simple Start (not on Sole Trader Plus)
Self Assessment filing	Yes, built in	Through your accountant	Prepares for Self Assessment
Corporation Tax and final accounts	Included on the Limited Company plan (micro-entities)	Optional add-on, £120 a year	Not listed on plan pages
Receipt capture	10 a month; unlimited £5 a month	Hubdoc included	Included in the app
Multi-currency	Yes	From Comprehensive (£55)	From Essentials (£40)
Users	Multiple users, with access levels	Depends on plan and add-ons	1 (Sole Trader Plus, Simple Start), 3, 5 or 25, plus your accountant

What you’ll actually pay

Headline prices don’t tell the whole story, because each provider puts different things in the box. Here’s the typical monthly cost for three common situations, at full price after any introductory offer ends.

Your situation	FreeAgent	Xero	QuickBooks
Sole trader, not VAT registered	£19 (or free with an eligible bank)	£7 (Simple)	£10 (Sole Trader Plus)
Sole trader, VAT registered	£19 (or free)	£18 (Ignite, capped at 20 invoices and 10 bills a month) or £39 (Grow)	£18 (Simple Start)
Limited company, director on payroll, year-end filing in the software	£33 (or free): payroll, Corporation Tax and final accounts included	About £49: Grow £39 (1 person’s payroll) plus the £120-a-year accounts and tax add-on	£18 or more, plus the payroll add-on; plan for an accountant to handle Corporation Tax

Two things to remember. First, the 90% discounts from Xero and QuickBooks make the first six months very cheap, but budget for the full price afterwards. Second, if you use an accountant, their fee often matters more than the software price, and many accountants get discounted subscriptions for clients on the software they prefer.

FreeAgent: built for freelancers and small companies

FreeAgent was designed for freelancers, contractors and very small businesses, and its pricing reflects that. You pay one price for your business type, and almost everything is included: invoicing, expenses, mileage, bills, projects and time tracking, multi-currency, payroll for as many employees as you need, and direct filing to HMRC.

Its standout feature is the tax timeline, which shows what you owe and when, updating as you work. Sole traders can file Making Tax Digital quarterly updates and their Self Assessment from inside FreeAgent. On the Limited Company plan you can also file your Corporation Tax return (CT600) and final accounts to HMRC and Companies House, as long as your company counts as a micro-entity.

• Good: payroll and year-end filing included; clear tax overview; UK-based support by phone, email and chat; free with four UK banks.
• Watch out: only 10 receipt or bill captures a month before the £5 add-on; payroll runs monthly only (no weekly pay); fewer third-party integrations than Xero or QuickBooks; year-end filing only covers micro-entity accounts.
• Best for: sole traders, freelancers and one- or two-person limited companies who want their tax handled in one place.

Xero: built to grow with you

Xero is the accounting platform many UK accountants and bookkeepers use by default, and it has the biggest marketplace of connected apps, from ecommerce and stock control to payments and reporting. Its bank reconciliation is fast and well liked, and Hubdoc bill and receipt capture is included on every plan.

The plan ladder is designed for growth. Simple (£7) suits sole traders and landlords who aren’t VAT registered. Ignite (£18) adds VAT but caps you at 20 invoices and 10 bills a month. Grow (£39) removes those caps and includes payroll for one person. Comprehensive (£55) adds multi-currency, budgets and payroll for five people, and Ultimate (£70) adds projects and deeper analytics. Corporation Tax and company accounts are available as a £120-a-year add-on, and CIS returns cost £5 a month.

• Good: accountant-friendly; huge range of integrations; scales from a sole trader to a multi-person business; Hubdoc included.
• Watch out: Ignite’s invoice and bill caps are tight for busy businesses; useful features (payroll for more people, extra expense users at £2.50 each, auto-reconcile on Ignite at £3.50) add up; no built-in Self Assessment filing.
• Best for: businesses that expect to grow, use lots of other apps, or work closely with an accountant who prefers Xero.

QuickBooks: best for admin on the go

QuickBooks is strongest when you’re out and about. Its mobile app tracks mileage by GPS, captures receipts with your camera and suggests categories for bank transactions, and its AI assistant (Intuit Intelligence) is included in every plan with limits.

Sole Trader Plus (£10) covers Making Tax Digital for Income Tax and CIS, but can’t submit VAT returns. Simple Start (£18) adds VAT for one user. Essentials (£40) adds bills, multi-currency and three users, and Plus (£60) adds project profitability, inventory and purchase orders for five users. Payroll (Core, Premium or Elite) is an extra cost on every plan, and QuickBooks’ plan pages don’t list Corporation Tax or final accounts filing, so limited companies usually rely on an accountant for year-end.

• Good: excellent mobile app; inventory on Plus, which suits product sellers; big introductory discounts; well known by accountants.
• Watch out: payroll always costs extra; prices have risen in recent years; Sole Trader Plus and Simple Start allow only one user plus your accountant.
• Best for: trades and mobile businesses, product sellers who need stock control, and anyone who does most of their admin on a phone.

Head to head: the features that matter most

Making Tax Digital and Self Assessment

All three are ready for Making Tax Digital for Income Tax, which applies to sole traders and landlords with qualifying income over £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028. FreeAgent goes furthest for individuals, filing both your quarterly updates and your Self Assessment return. With Xero and QuickBooks, your accountant often handles the final return.

Payroll

FreeAgent includes payroll for unlimited employees on every plan, though it only supports monthly pay runs. Xero includes payroll for one person on Grow and five on Comprehensive, then charges £1.50 per extra person. QuickBooks charges for payroll as a separate add-on. If you’re a limited company director paying yourself a salary, FreeAgent or Xero Grow is usually the simplest route.

Limited company year-end

This is FreeAgent’s biggest advantage for small companies: Corporation Tax returns and micro-entity final accounts are included on the Limited Company plan. Xero offers the same as a £120-a-year add-on. QuickBooks doesn’t list it, so you’d normally pay an accountant or use separate filing software.

Apps and integrations

Xero leads, with QuickBooks close behind; both connect to hundreds of apps for payments, ecommerce, stock and reporting. FreeAgent’s list is shorter but covers the essentials, including Stripe, PayPal, GoCardless and Tyl by NatWest.

Support

FreeAgent offers UK-based support by phone, email and chat. Xero and QuickBooks both offer online support and help centres; QuickBooks also includes a free onboarding call. If you value being able to ring someone, FreeAgent has the edge.

Which should you choose?

• You bank with NatWest, RBS, Ulster Bank or Mettle: start with FreeAgent. It’s free for you and covers the most out of the box.
• You’re a one-person limited company: FreeAgent, for payroll and year-end filing in one price. Xero Grow plus the accounts add-on is the alternative if your accountant prefers Xero.
• You’re growing, hiring or selling through other platforms: Xero, for its integrations and plans that scale.
• You hold stock or work on the road: QuickBooks, for inventory on Plus and its mobile app.
• You’re a sole trader and not VAT registered, on a tight budget: Xero Simple (£7) or QuickBooks Sole Trader Plus (£10), or see the free options in our sole trader guide.
• You have an accountant: ask which one they use. Matching their software saves time and often money.

Switching between them

1. Pick a clean start date, ideally the start of a tax year, VAT quarter or financial year.
2. Export everything first: contacts, invoices, bills, the trial balance and VAT history.
3. Check migration help: all three offer import tools, and accountants can often move your data for you.
4. Run both for a month if you can, so nothing is missed before you cancel the old subscription.
5. Reconnect your bank feeds and HMRC connections (VAT and Making Tax Digital) in the new software.

Frequently asked questions

Which is cheapest: Xero, QuickBooks or FreeAgent?

For a sole trader who isn’t VAT registered, Xero Simple at £7 a month is the cheapest paid plan. FreeAgent is cheapest of all if you qualify for it free through NatWest, RBS, Ulster Bank or Mettle. For a limited company that wants payroll and year-end filing, FreeAgent’s £33 plan usually works out cheapest.

Which do accountants prefer?

Xero and QuickBooks are the most widely used by UK accountants, and FreeAgent is popular with accountants who specialise in freelancers and contractors. Ask yours before you choose.

Are all three ready for Making Tax Digital for Income Tax?

Yes. All three list MTD for Income Tax support, and you can check them against HMRC’s own software finder on GOV.UK.

Can I file my company’s Corporation Tax return myself?

With FreeAgent’s Limited Company plan you can file the CT600 and micro-entity final accounts directly. Xero offers this as a paid add-on. If your accounts are more complex, an accountant is still the safer choice.

Next steps

Still deciding? Compare free and budget options in our best accounting software for UK sole traders guide, read how to set up business accounting, or browse all our finance and operations guides.

Just starting out? Get our free UK Startup Toolkit: a 40-step startup checklist, a startup costs calculator and 50 AI prompts, plus one practical tip every Monday.

This guide is general information, not tax or financial advice. Check GOV.UK or speak to an accountant about your situation. Sources: the UK pricing and feature pages of FreeAgent, Xero and QuickBooks, FreeAgent’s support guidance on filing, and HMRC guidance on Making Tax Digital for Income Tax, checked 7 November 2026.