Key takeaways
- Zoho Books has a free plan for up to 1,000 invoices and 1,000 expenses a year that files MTD VAT returns and is MTD for Income Tax ready.
- FreeAgent is free for as long as you keep a NatWest, Royal Bank of Scotland or Ulster Bank business account, or a Mettle account used at least once a month for most plans.
- Xero and QuickBooks were offering 90% off for six months on 6 November 2026; Xero then costs £18 to £70 a month and QuickBooks £16 to £115 a month, ex VAT.
- FreeAgent charges £19 a month for sole traders and £33 a month for limited companies, with 50% off for the first six months on monthly billing.
- Since 1 April 2026 companies must file their Company Tax Return with commercial software, and HMRC marks only FreeAgent and Zoho of these four as suitable for self-filers.
- Sole traders and landlords with qualifying income over £30,000 must use Making Tax Digital for Income Tax from 6 April 2027, and over £20,000 from 6 April 2028.
The best accounting software for a UK startup is usually the one that costs least in year one and still fits once you grow. A free plan or a bank-linked free licence keeps early costs at zero, but check the price after any introductory offer ends. This page compares FreeAgent, QuickBooks, Xero and Zoho Books using each provider’s website on 6 November 2026.
How we compared the software
We list the packages alphabetically and do not rank or score them. Prices come from each provider’s own pricing page on 6 November 2026 and exclude VAT. Filing features come from HMRC’s lists.
Sage’s website blocked our checks, so Sage is not compared here. See Sage Accounting pricing for what we could and could not confirm.
What does startup accounting software cost?
Entry prices range from £0 to £19 a month before discounts. The table shows the lowest paid plan and the first-year offer.
| Software | Free route | Entry paid plan (ex VAT) |
|---|---|---|
| FreeAgent | Free with NatWest, RBS, Ulster Bank or Mettle | £19 a month, sole trader |
| QuickBooks | 30 day free trial | £16 a month, Simple Start |
| Xero | None | £18 a month, Ignite |
| Zoho Books | Free plan | £12 a month, Standard |
Introductory offers on the day we checked: FreeAgent 50% off for six months, QuickBooks 90% off for six months, Xero 90% off for six months. QuickBooks says its discount cannot be combined with the free trial.
The four packages in brief
FreeAgent
FreeAgent costs £19 a month for sole traders, £27 for partnerships and LLPs, and £33 for limited companies. Annual billing is £190, £270 and £330, with 50% off the first year. It is free while you keep a NatWest, Royal Bank of Scotland or Ulster Bank business account. Mettle customers get it free on the sole trader, limited company and landlord plans if they make at least one transaction a month.
QuickBooks
Intuit’s QuickBooks UK plan page lists Simple Start at £16, Essentials at £33, Plus at £47 and Advanced at £115 a month. Its main pricing page showed “Loading live prices” when we checked. The Sole Trader Plus plan cannot submit VAT returns to HMRC directly, so a startup that expects to register for VAT should look at Simple Start or above. See QuickBooks pricing.
Xero
Xero UK lists Ignite at £18, Grow at £39, Comprehensive at £55 and Ultimate at £70 a month. New UK customers get 90% off for six months, so Ignite costs £1.80 a month at first. Ignite allows 20 invoices and 10 bills a month. Every plan is listed as MTD for Income Tax ready. See Xero pricing.
Zoho Books
Zoho Books UK has a Free plan for one user plus your accountant, up to 1,000 invoices a year. Paid plans start with Standard at £12 a month, or £10 billed annually, for three users. Zoho says sole traders and landlords can stay MTD compliant on the free plan.
Which applies to your startup?
Use these tests to narrow the list.
- If you are a sole trader with low income, a free plan may be all you need until MTD for Income Tax applies to you.
- If you run a limited company and file your own return, choose software HMRC marks suitable for self-filers. On HMRC’s Corporation Tax software list, updated 12 October 2026, that is FreeAgent and Zoho of these four.
- If you already bank with NatWest, RBS, Ulster Bank or Mettle, check the free FreeAgent route first.
- If you expect to pass the £90,000 VAT threshold, pick a plan that files MTD VAT returns. See the VAT registration threshold.
- If you plan to hire staff, compare payroll costs: Xero includes one person from Grow, and charges £1.50 a person on Ignite.
When does Making Tax Digital apply to a new business?
MTD for Income Tax depends on your qualifying income from self-employment and property. HMRC’s eligibility guidance, updated 26 March 2026, sets these dates.
| Qualifying income | Tax year measured | MTD from |
|---|---|---|
| Over £50,000 | 2024 to 2025 | 6 April 2026 |
| Over £30,000 | 2025 to 2026 | 6 April 2027 |
| Over £20,000 | 2026 to 2027 | 6 April 2028 |
You must file a Self Assessment return for a year before you start MTD, so a brand new sole trader joins later. Companies are not in MTD for Income Tax, but since HMRC’s free filing service closed on 31 March 2026 they need commercial software for the Company Tax Return.
How to choose: a checklist
- Decide your business structure: sole trader, partnership or limited company.
- Check whether your bank gives you free software.
- Count your invoices and bills a month and check plan limits.
- Work out the price after the introductory offer ends.
- Check MTD VAT and, for sole traders, MTD for Income Tax support.
- Ask your accountant which package they support.
For more options, see free accounting software and our guide for limited companies.
Frequently asked questions
Is there free accounting software for startups in the UK?
Yes. Zoho Books has a free plan for up to 1,000 invoices a year, and FreeAgent is free with a NatWest, RBS, Ulster Bank or qualifying Mettle account.
How much does accounting software cost after the offer ends?
On 6 November 2026 entry plans cost £18 a month for Xero Ignite, £16 for QuickBooks Simple Start, £19 for FreeAgent sole trader and £12 for Zoho Books Standard, all ex VAT.
Do startups need Making Tax Digital software?
VAT-registered businesses need MTD-compatible software for VAT returns. Sole traders and landlords need it for Income Tax once qualifying income passes the threshold, which is £30,000 from 6 April 2027.
Which software can a new company use to file its own Company Tax Return?
Of the four packages here, HMRC lists FreeAgent and Zoho as suitable for self-filers. Xero Tax is listed but marked not suitable for self-filers, and QuickBooks is not listed.
Do these prices include VAT?
No. All prices on this page exclude VAT at 20%.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.