Hnry vs Xero vs Sage: which suits a sole trader?

Hnry, Xero and Sage solve different problems for a sole trader. Hnry is a service that takes your tax off each payment and files your returns for a percentage fee. Xero and Sage are bookkeeping software on a monthly plan, where you or your accountant do the filing. This page sets out the facts side by side, with prices checked on 6 November 2026, and does not pick a winner.

How do Hnry, Xero and Sage differ?

The main difference is who does the work. The table compares the basics, listed alphabetically.

What does each cost?

Each provider prices differently, so compare on your own income.

Hnry. Hnry’s pricing page says it charges 1% plus VAT of every payment into your Hnry Account, capped at £600 plus VAT a year. Payments under £50 carry a minimum fee of £0.50 plus VAT. There is no subscription.

Sage. Sage says Sage Sole Trader Free is available at no cost, in a post dated 30 July 2026. Sage’s pricing pages blocked our checks on 6 November 2026, so we cannot confirm the price of its paid plans. Check sage.com before you compare.

Xero. Xero’s UK plans are listed below, excluding VAT. New UK customers get 90% off the base plan for the first 6 months.

Worked example: a sole trader earning £30,000

On the prices above, a year costs:

• Hnry: 1% of £30,000 is £300, plus VAT, so £360.
• Sage Sole Trader Free: £0, if its limits fit your business.
• Xero Ignite: £1.80 a month for 6 months then £18 for 6 months, so £118.80 plus VAT in year one and £216 plus VAT a year after.

The Hnry fee includes filing. With Xero or Sage, add an accountant’s fee if you do not file yourself; see what a tax return accountant costs.

Which features does each include?

Each product covers the basics, but in different ways.

“Check plan” means we could not confirm the feature from the provider’s own pages on 6 November 2026.

Xero also lists Construction Industry Scheme reports on every plan, with contractor CIS returns at £5 a month. Hnry lists Allocations, which move money automatically to savings or pensions.

Are they ready for Making Tax Digital?

All three say they support MTD for Income Tax. From 6 April 2027 it applies to sole traders and landlords with qualifying income over £30,000, falling to £20,000 from April 2028. See who must join in April 2027.

• Hnry says it is “fully MTD compliant” and sends quarterly updates and the year-end return for you.
• Sage says it appears on HMRC’s recognised list, but adds that “HMRC-recognised” is “a good starting point”, not a guarantee of full coverage.
• Xero marks every plan as “MTD for Income Tax ready”.

GOV.UK says every product in its MTD software finder has been through HMRC’s recognition process and that HMRC does not recommend any product. Check your income types, such as property income, are covered. Our MTD software requirements page explains what software must do.

Which suits you?

Use the facts above against your own situation.

• If you want your tax paid and filed for you, Hnry is the only one of the three built that way.
• If you want the lowest software cost and have simple books, look at Sage Sole Trader Free first.
• If you work with an accountant who uses Xero, a Xero plan lets you share the same file.
• If you might incorporate later, Xero and Sage both serve limited companies; Hnry does not. See sole trader vs limited company.
• If you earn over £60,000, Hnry’s fee stops rising at £720 a year including VAT.
• If you have rental income too, check each product’s property support, since Hnry does not describe landlord features.

Read our full Hnry review and Xero review for more detail.

Frequently asked questions

Is Hnry cheaper than Xero?

It depends on your income. At £30,000, Hnry costs £360 a year including VAT, against £216 plus VAT a year for Xero Ignite at full price, but Hnry’s fee includes filing your returns.

Does Xero file my Self Assessment return?

Xero’s pricing page lists Company accounts and tax for limited companies at £120 a year, but does not list a Self Assessment filing service for sole traders. Many sole traders on Xero use an accountant to file.

Is Sage free for sole traders?

Sage says Sage Sole Trader Free is available at no cost and is on HMRC’s recognised list for MTD for Income Tax. Check its usage limits before you sign up.

Can I use Hnry with an accountant?

Hnry files your returns itself, with its own team of tax specialists. If you already pay an accountant, ask whether they will work with Hnry’s records.

Which is best for MTD for Income Tax?

We do not rank them. All three say they support MTD for Income Tax; check each appears in HMRC’s software finder for your income types.