There is no best one. There is a cheapest one for your structure, and a free one if you bank in the right place.
We checked the live pricing pages for Xero, QuickBooks, FreeAgent, Sage and Pandle on 21 August 2026. Every figure below comes from the provider’s own page on that date, and all are standard list prices rather than promotional rates. Four of the five were discounting when we looked, which is a trap we come back to.
One dated change to flag up front. Xero’s UK subscription prices rise on 1 September 2026. The Xero figures in the table below are its published prices from that date, not the ones showing before it.
The prices, from September 2026
| Product | Plan | Price per month | VAT |
|---|---|---|---|
| Sage | Sole Trader — free | £0 | — |
| Pandle | Free | £0 | — |
| Pandle | Pro | £5 | + VAT |
| Sage | Sole Trader — paid | £7 | ex VAT |
| Xero | Simple | £7 | ex VAT |
| FreeAgent | Unincorporated landlord | £10 | ex VAT |
| QuickBooks | Sole Trader Plus | £10 | + VAT |
| QuickBooks | Simple Start | £16 | + VAT |
| Xero | Ignite | £18 | ex VAT |
| FreeAgent | Sole trader | £19 | ex VAT |
| Sage | Accounting Start | £20 | ex VAT |
| FreeAgent | Partnership / LLP | £27 | ex VAT |
| FreeAgent | Limited company | £33 | ex VAT |
| QuickBooks | Essentials | £38 | + VAT |
| Xero | Grow | £39 | ex VAT |
| Xero | Comprehensive | £55 | ex VAT |
| QuickBooks | Plus | £56 | + VAT |
| Xero | Ultimate | £70 | ex VAT |
| QuickBooks | Advanced | £123 | + VAT |
On the Xero row, note the date. Until 31 August 2026 the same plans were £16 Ignite, £37 Grow, £50 Comprehensive and £65 Ultimate. Simple stays at £7. Anything you read quoting the older four figures predates the increase.
The cheapest paid tier is a two-way tie. Sage Sole Trader and Xero Simple both sit at £7 a month excluding VAT. If you are a non-VAT-registered sole trader and £7 is your budget, you have two options, not one.
FreeAgent also prices annually: £100 landlord, £190 sole trader, £270 partnership or LLP, £330 limited company, all excluding VAT. Paying annually is cheaper than twelve monthly payments in every case.
The FreeAgent freebie changes the maths
FreeAgent is free if you hold a business current account with NatWest, Royal Bank of Scotland or Ulster Bank, for as long as you retain the account. It is also free with a Mettle account, provided you make Mettle your primary business account in FreeAgent and make at least one transaction a month.
That is a £330-a-year limited company product at zero cost. Optional add-ons remain chargeable — Smart Capture Unlimited is £5 a month and the Amazon marketplace connector £6 a month, both excluding VAT.
If you are choosing software and you are also choosing a bank, do those two decisions together. It is the single most overlooked saving in this category.
Who each one actually suits
Sage Sole Trader — free plan. Genuinely free, HMRC-recognised, and MTD-ready for non-VAT-registered sole traders and landlords. You get income and expense management, one connected bank account, an Income Tax Self Assessment summary (SA103S), manual receipt entry, a mobile app, 25 auto-categorised transactions and five sales invoices a month. That invoice cap is the constraint. If you raise more than five invoices a month, this is not your product.
Pandle. A free tier and a Pro tier at £5 a month + VAT. Read the feature split carefully: bank feeds, receipt uploads and MTD Income Tax submissions sit on Pro, not on free. The free version is a genuine bookkeeping tool, not a filing tool.
QuickBooks. Five UK tiers, every one displayed with “(All prices + VAT @20%)”: Sole Trader Plus £10, Simple Start £16, Essentials £38, Plus £56 and Advanced £123. Sole Trader Plus is the non-VAT-registered entry point, Simple Start the one you move to on registration. Clean pricing, heavy investment in automated categorisation. That two-tier entry structure makes VAT registration a £6-a-month event rather than a jump to a different product.
Xero. Simple at £7 a month excluding VAT sits on the non-VAT-registered view of Xero’s pricing page and is the cheapest way in. Ignite at £18 a month excluding VAT includes VAT return submission and subcontractor CIS calculations, which is unusually generous at that level. Watch the add-ons: payroll is £1.50 per person per month, contractor CIS returns £5 a month, auto-reconciliation £3.50 a month, and additional users £2.50 each. Xero’s own feature matrix shows expense claims excluded on Ignite and included from Grow upwards. An £18 headline can become £27 quickly.
FreeAgent. Priced by business structure rather than feature tier, which is unusual and refreshing — a landlord pays £10, a limited company £33, and nobody has to work out which tier they need. Free with the right bank account.
Sage Accounting Start. £20 a month excluding VAT for VAT-registered sole traders and small businesses, and it now includes payroll — which at Xero would be a per-person add-on.
The promotional discount trap
On the day we checked, four of the five providers were discounting. Xero was 80% off for six months, QuickBooks 90% off for six months, Sage 90% off for six months, and FreeAgent 50% off for six months or the first year. Pandle was the exception — its page showed a free tier and Pro at £5 + VAT, with no introductory offer on either.
Those offers are real. They are also short. The number that matters is what you pay in month seven, and that is the number in the table above. A “£1.60 a month” QuickBooks headline is £16 a month from month seven; an 80%-off Xero Ignite headline is £18.
Budget on the list price. Treat the discount as a bonus.
What to check before you commit
HMRC recognition for the taxes you actually file. MTD for VAT applies to all VAT-registered businesses. MTD for Income Tax applies to sole traders and landlords with qualifying income over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. Being “MTD ready” for one is not the same as being recognised for the other.
Which plan the feature sits on. Pandle’s MTD Income Tax submissions are on Pro. Xero’s expense claims start at Grow. Sage’s free plan caps you at five invoices a month. The headline price is only relevant if the plan does the job.
Digital links. Whatever you use has to move data to HMRC without anyone retyping it. Copy and paste is not a digital link under either MTD regime. If your setup involves a spreadsheet, you need a genuine digital link or bridging software between it and whatever files.
Whether your accountant works in it. Migration is annoying, and an accountant fluent in your software costs you less than one who is not.
Payroll and CIS pricing. Both are add-ons in most packages and both are priced per head or per submission. If you have five employees, model the total, not the base.
The VAT scheme you are on. Flat Rate, Cash Accounting and Annual Accounting are not universally supported at entry level. Confirm before you buy if you use one.
What software will not do
Bank feeds propose categories based on what you did last time. They are a suggestion engine, not a decision engine. Nothing in this list will decide whether a purchase is capital or revenue, whether entertaining is disallowable, whether a payment to yourself is salary, dividend or a director’s loan, or how partial exemption applies.
Those are the decisions that cost money when they go wrong, and they are still yours.
Frequently asked questions
What is the best accounting software for a UK small business?
There is no single best. For a non-VAT-registered sole trader, Sage’s free Sole Trader plan, or Sage Sole Trader paid and Xero Simple at £7 a month excluding VAT, or QuickBooks Sole Trader Plus at £10 a month + VAT, are the cheapest credible options. For a limited company, FreeAgent at £33 a month excluding VAT or Xero Ignite at £18 excluding VAT are the usual starting points. If you bank with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle, FreeAgent is free.
Is there free accounting software in the UK?
Yes. Sage Sole Trader has a genuinely free plan for non-VAT-registered sole traders and landlords, capped at five sales invoices a month. Pandle has a free tier, though bank feeds, receipt uploads and MTD Income Tax submissions sit on its £5 a month + VAT Pro plan. FreeAgent is free with a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account.
How much does Xero cost in the UK?
From 1 September 2026, Xero’s UK plans are £7 Simple, £18 Ignite, £39 Grow, £55 Comprehensive and £70 Ultimate, all per month excluding VAT. Until 31 August 2026 the four tiers above Simple were £16, £37, £50 and £65; Simple was unchanged at £7. Payroll is £1.50 per person per month on top, contractor CIS returns £5 a month, auto-reconciliation £3.50 a month, and additional users £2.50 each.
Which accounting software works with Making Tax Digital?
All the mainstream UK packages are HMRC-recognised, but recognition is granted separately for MTD for VAT and MTD for Income Tax, and sometimes only on certain plans. Check the specific plan against HMRC’s recognised software list for the tax you actually file rather than relying on a general “MTD ready” claim.
Should I pay monthly or annually?
Annually, where the provider offers it. FreeAgent’s annual prices — £100 landlord, £190 sole trader, £270 partnership or LLP, £330 limited company, all excluding VAT — are cheaper than twelve monthly payments in every case. Just be confident you are staying, because switching mid-year wastes the difference.
Software is the tool, not the job
SmartFiling runs bookkeeping on flexible plans in whichever package suits your structure — Xero, QuickBooks, FreeAgent, Sage or Dext. We will tell you honestly if the free option is enough for you, and set it up if it is.
Fixed fees agreed upfront, fully online, no phone calls required. Every filing reviewed by an ICAEW Chartered Accountant.
SmartFiling is the trading name of Ballards Newman (Finchley) Limited, an ICAEW-regulated London practice with over twenty years of UK tax and compliance experience.
