Best Accounting Software for UK Small Businesses
By PriceDetective Editorial Team · Verified by our deals experts
Compare UK accounting software prices for sole traders, freelancers, and SMEs. Track deals on Xero, QuickBooks, FreshBooks, and more — all Making Tax Digital compliant.
With Making Tax Digital (MTD) now mandatory for all VAT-registered businesses and expanding to income tax from April 2026, choosing MTD-compliant accounting software isn't optional — it's a legal requirement. We track pricing for every HMRC-recognised provider.
Xero is the UK market leader for good reason: clean interface, strong bank feeds (all major UK banks), and excellent accountant collaboration. Their Starter plan (from £15/month) covers sole traders; Growing (£30/month) suits most SMEs. QuickBooks Self-Employed (from £6/month) is the cheapest MTD-compliant option for freelancers. FreeAgent (free with NatWest/RBS business accounts) is the best value if you bank with them.
We run our own company accounts through Xero and have tested QuickBooks and FreshBooks for comparison. The deals below are verified against live pricing — and remember, accounting software is a tax-deductible business expense.
Frequently Asked Questions
What is the cheapest MTD-compliant accounting software?
FreeAgent is free with NatWest/RBS business accounts. Otherwise, QuickBooks Self-Employed starts at £6/month. Xero Starter is £15/month but offers more features. All are HMRC-recognised for Making Tax Digital.
Do I need accounting software as a sole trader?
From April 2026, sole traders earning over £50,000 must use MTD-compatible software for income tax. Even below this threshold, software saves hours on bookkeeping and Self Assessment. It's also tax-deductible.
Xero vs QuickBooks — which is better for UK businesses?
Xero has better UK bank integrations and is preferred by most UK accountants. QuickBooks is cheaper at entry level and has a simpler interface. For businesses with a UK accountant, Xero is usually the better choice.
Can I switch accounting software mid-year?
Yes, but it's easier at the start of a VAT quarter or financial year. Most providers offer free data migration tools. Export your chart of accounts, opening balances, and outstanding invoices before switching.
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