Bookkeeping software: check the free route first
For many sole traders and single-director companies the right amount to spend on bookkeeping software is £0, because FreeAgent, which sells for £19 to £33 a month, comes completely free with a Mettle business account. Check that route before you pay for a subscription. If it does not fit, paid plans start at £10 a month with QuickBooks, and all four mainstream options below handle Making Tax Digital. Here is the market at a glance, and a short method for choosing.
| Software | Cheapest plan | Popular plan | MTD ready | The catch |
|---|---|---|---|---|
| FreeAgent | £0 via Mettle (£19 direct) | £33 limited company | Yes | Free route needs one Mettle transaction a month |
| QuickBooks | £10 Sole Trader | £16 Simple Start | Yes | Heavy intro discounts, then full price |
| Sage | £20 one user | £43 three users | Yes | Near-continuous promos hide the real price |
| Xero | Ignite entry tier | £37 Grow | Yes | Payroll and expenses cost extra |
The free route: FreeAgent through Mettle
FreeAgent is completely free with a Mettle business account, and also free through NatWest or RBS business banking; the only condition is one transaction a month from the account. That is the same software that sells directly for £19 a month as a sole trader, £27 for a partnership and £33 for a limited company, and it handles both MTD Income Tax quarterly updates and VAT. If you are choosing a bank and a bookkeeping tool at the same time, this pairing settles both decisions at once; the Mettle review covers the account itself.
The other shape: an account that keeps the books
Countingup is not software you connect to a bank account, it is the account and the bookkeeping in one app, from £3 a month depending on what you bank. Transactions categorise themselves, receipts attach, VAT returns file in app, a running tax estimate updates as money arrives, and your accountant gets their own login. That suits a sole trader who wants one thing to think about rather than two, and it takes cash at the Post Office for 0.5%, the cheapest counter rate we have found. Two things to weigh before you switch: it is e-money rather than a bank, so there is no FSCS cover, and transfers and direct debits cost 30p each, which adds up if you pay a lot of suppliers. Check the eligibility rules too, because they are tighter than most: sole traders and small limited companies only, up to two directors. Worth pricing against a free account plus one of the tools above on total monthly cost. The comparison table has the full figures.
The paid options, at full price
QuickBooks is the cheapest paid route at £10 a month for its Sole Trader Plus plan, with Simple Start at £16 and Essentials at £38, though its frequent introductory discounts mean the first months often cost far less. Sage starts at £20 for one user, £43 for three and £59 for unlimited, and runs near-continuous promotions on the first months too. Xero sits at the top: the popular Grow plan is £37, up from £33 on 1 September 2025, with the entry Ignite tier below it, and add-ons priced separately at £1.50 per person for payroll and £2.50 per user for expenses. Always compare on the full monthly price, because that is the one you keep paying.
MTD is the deadline forcing the decision
MTD for Income Tax has been in force since 6 April 2026 for qualifying income over £50,000, and the threshold falls to £30,000 in April 2027. Quarterly updates have to go through compatible software, so spreadsheets alone no longer cut it for those in scope. All four products on this page are MTD-compatible; the filing guide sets out the deadlines the software is protecting you from.
How to choose
- Check the free route first. If you bank with Mettle, NatWest or RBS, or would happily switch, FreeAgent costs nothing and the decision is made.
- Simple sole trader books: QuickBooks Sole Trader at £10 is the cheapest paid plan on the market and covers MTD quarterly updates.
- Limited company with staff: compare QuickBooks Essentials at £28 against Xero Grow at £37, and price Xero's payroll and expenses add-ons into the total before deciding.
- Ignore the intro price. QuickBooks and Sage discount heavily at the start; judge every option on what it costs in month twelve.
Questions people actually ask
What is the best free bookkeeping software in the UK?
FreeAgent, which is completely free with a Mettle business account and also free through NatWest or RBS business banking. The only requirement is one transaction a month from the account. Bought directly it costs £19 to £33 a month, so the bundle is a genuine saving.
What software do I need for Making Tax Digital?
Any of FreeAgent, Xero, QuickBooks or Sage: all four are MTD-compatible. MTD for Income Tax has been in force since 6 April 2026 for qualifying income over £50,000, so the software must file quarterly updates as well as VAT returns.
How much does Xero cost in 2026?
The popular Grow plan is £37 a month excluding VAT, with Ignite at £16 below it and Comprehensive at £50 above. Payroll and expenses are add-ons at £1.50 per person and £2.50 per user respectively, so budget for the extras. Xero has announced a further UK price rise from 1 September 2026.
Is QuickBooks cheaper than Xero?
Yes at every published tier: QuickBooks runs £10 for Sole Trader Plus, £16 for Simple Start and £38 for Essentials, all under Xero's £37 Grow plan except Essentials. QuickBooks also runs heavy introductory discounts, but compare on full price, since that is what you pay from month seven onwards.
When did MTD for Income Tax start?
6 April 2026, for sole traders and landlords with qualifying income over £50,000. The threshold falls to £30,000 in April 2027, pulling in a much larger group. It replaces the single annual return with quarterly updates filed through compatible software.
Figures checked 7 August 2026 by S5 editorial against each provider's own published pricing. Confirm details with the provider before applying.