Every UK small business ends up asking the same question sooner or later: which accounting package do I actually need? The market’s crowded, the pricing pages are confusing, and half the “best of” lists online are written by the software companies themselves. Here’s a straight breakdown of the big three, plus the alternatives worth knowing about, with current UK pricing and who each one genuinely suits.
Prices below are correct as of August 2026, exclude VAT, and are the standard monthly rate — most providers run introductory discounts (50–90% off) for the first few months, so check current offers before you commit.
Xero
Xero is the cloud accounting platform most UK accountants already know, with a huge app ecosystem (1,000+ integrations) and unlimited users on every plan.
| Plan | Price/month | What you get |
|---|---|---|
| Ignite | £16 | Up to 20 invoices/10 bills a month, bank reconciliation |
| Grow | £37 | Unlimited invoicing, bill management, payroll add-on available |
| Comprehensive | £50 | Multi-currency, projects, more users on payroll/expenses |
| Ultimate | £65 | Full reporting suite, cheapest per-employee payroll add-on |
Payroll, expenses and extra users are all paid add-ons on top of the base price, so budget for that once you’re past Ignite.
Best for: growing SMEs with a few employees, anyone whose accountant already works in Xero, and businesses that trade internationally and want strong multi-currency support.
Sage
Sage is the veteran of UK accounting software, built around HMRC requirements from the start and still the platform most traditional accountancy firms expect to see.
Sage actually runs two separate products for UK small businesses:
| Plan | Price/month | What you get |
|---|---|---|
| Sage Sole Trader (Free) | £0 | Non-VAT-registered sole traders — self-assessment, MTD income tax prep |
| Sage Sole Trader (paid) | £7 | Extra features, AI capabilities, expert support |
| Sage Accounting – Start | £20 (1 user) | VAT-registered sole traders/small businesses just starting out |
| Sage Accounting – Standard | £43 (3 users) | Receipt/invoice scanning, CIS, suppliers |
| Sage Accounting – Plus | £59 (unlimited users) | Multi-currency, budgets, inventory |
(Verified directly against sage.com — prices exclude VAT and are list price; Sage runs a 90%-off-for-6-months promo continuously.)
Best for: businesses that want payroll bundled in without extra per-user add-on complexity, and anyone who values Sage’s long track record with UK accountants over a flashier interface.
Zoho Books
Zoho Books is the newer, cheaper option — and the best value if you’re already using other Zoho apps (CRM, Zoho One, etc).
| Plan | Price/month (billed annually) | What you get |
|---|---|---|
| Free | £0 | 1 user + accountant, up to 1,000 invoices/year, MTD-ready for sole traders |
| Standard | £10 | Bank feeds, recurring expenses, custom reports |
| Professional | £20 | Multi-currency, inventory, CIS returns to HMRC |
| Premium | £25 | Budgets, cashflow forecasting, custom portals |
| Elite | £85 | Full inventory management, multi-channel selling (Etsy/eBay/Amazon) |
| Ultimate | £165 | Advanced analytics and BI dashboards |
Best for: cost-conscious sole traders and micro-businesses (the free tier is genuinely usable), and anyone already inside the Zoho ecosystem. Downsides: fewer UK accountants know it well, and it doesn’t file Self Assessment returns directly — you’ll still need HMRC’s portal for that.
Other options worth a look
- QuickBooks — Sole Trader £10/month, Simple Start £16, Essentials £38, Plus £50, Advanced £115. Strong mobile app and bank reconciliation. Best for self-employed people and freelancers wanting the lowest realistic entry price with solid MTD support.
- FreeAgent — £19/month sole trader, £33/month limited company — but completely free if you bank with NatWest, RBS, Ulster Bank or Mettle. Best for freelancers and contractors, especially if you already bank with one of those providers.
- FreshBooks — invoicing-first tool, roughly £15–20/month for UK plans. Best for freelancers and service businesses whose main need is polished client invoicing and time tracking, rather than full double-entry bookkeeping.
The short version
- Want the safest, most widely-supported choice? Xero.
- Want payroll and compliance depth from a UK-built product? Sage.
- Want the cheapest capable option, especially at solo/micro scale? Zoho Books.
- Bank with NatWest, RBS or Mettle? FreeAgent, free, is hard to beat.
Whatever you pick, check it’s HMRC-recognised for Making Tax Digital before committing — all the options above are, but always confirm on HMRC’s current list.
Leave a Reply