Best accounting software for UK sole traders 2026
Independent, hands-on reviews of every MTD-compliant accounting tool — so you can find the right one without wading through sales pages.
Quick picks
Full reviews
FreeAgent is the strongest all-round choice for UK sole traders. It handles MTD for Income Tax, Self Assessment, invoicing and expenses in one clean interface — and it’s completely free if you hold a NatWest, RBS or Ulster Bank business account.
- Free with NatWest or RBS business account
- Full Self Assessment tax return filing built in
- Excellent mobile app for receipts and mileage
- HMRC-recognised MTD software
- Built specifically for freelancers and sole traders
- £14/month if you don’t bank with NatWest group
- Limited stock or inventory features
- No multi-currency support on sole trader plan
QuickBooks Self-Employed is the most popular choice for sole traders who want simple tax estimates and mileage tracking without learning a full accounting system. It provides a running estimate of your tax bill year-round and connects directly to HMRC for MTD submissions.
- Automatic mileage tracking via phone GPS
- Live tax estimate updated as you categorise transactions
- Very simple — no accounting knowledge needed
- Competitive pricing from £10/month
- Limited invoicing compared to FreeAgent
- No VAT return filing on Self-Employed plan
- Cannot file Self Assessment directly
Xero is the professional’s choice — deeper reporting, hundreds of integrations, and the accounting software most UK accountants prefer. It’s overkill for a very simple sole trader business, but ideal if you work with an accountant or plan to grow.
- Preferred by most UK accountants
- Excellent bank reconciliation tools
- 800+ integrations including Shopify, Stripe, Dext
- Multi-currency support available
- More expensive — from £16/month
- Steeper learning curve for non-accountants
- Starter plan limits invoices and bills per month
Feature comparison
| Feature | FreeAgent | QuickBooks SE | Xero Starter | Sage |
|---|---|---|---|---|
| Starting price | Free / £14 | £10/mo | £16/mo | £15/mo |
| MTD for Income Tax | Yes | Yes | Yes | Yes |
| Self Assessment filing | Yes | No | No | Yes |
| VAT returns | Yes | No | Yes | Yes |
| Invoicing | Unlimited | Basic | Limited | Unlimited |
| Auto mileage tracking | Yes | Yes (GPS) | No | Yes |
| Free with bank account | NatWest/RBS | No | No | No |
| Free trial | 30 days | 30 days | 30 days | 30 days |
What is Making Tax Digital?
Making Tax Digital (MTD) for Income Tax requires sole traders earning over £50,000 to use HMRC-approved software to keep digital records and submit quarterly updates from April 2026. The threshold drops to £30,000 in April 2027. Every tool on this page is MTD-compliant. Read our full plain-English MTD guide →