Best Bookkeeping Software for UK Sole Traders
A practical 2026 shortlist of bookkeeping tools that actually suit UK sole traders and freelancers — including the free options that often get overlooked.
For most UK sole traders: FreeAgent (free with NatWest/Mettle) or Coconut if you want a banking + bookkeeping combo. If you only want to file Self Assessment, HMRC's own online filing is still free — software earns its place by saving time, not unlocking the return.
| Tool | Monthly cost | Best for | MTD ITSA ready |
|---|---|---|---|
| FreeAgent (with Mettle/NatWest) | Free | Most sole traders | Yes |
| Coconut | From £5 | Banking + books in one app | Yes |
| Pandle | Free (Pro from £6) | Hate paying for software | Yes |
| QuickBooks Sole Trader | From £14 | Already on Intuit, side hustles | Yes |
| Xero Starter | From £16 | Plan to incorporate soon | Yes |
| GoSimpleTax | From £55/year | Self Assessment filing only | N/A |
What "good" looks like for a sole trader
- Bank feed from your business account so transactions appear automatically.
- Simple invoicing with a UK-compliant template and payment link.
- Receipt capture from your phone (snap, tag, attach to a transaction).
- Self Assessment output — either filed directly to HMRC or exported in the right shape.
- MTD for Income Tax (ITSA) readiness — mandatory from April 2026 for sole traders earning over £50,000, and from April 2027 for those over £30,000.
What you can ignore (for now)
Project costing, departmental reporting, multi-currency, inventory management and complex VAT schemes are all sole-trader overkill. If you genuinely need them, you've probably outgrown sole-trader status and should be thinking about incorporation.
From April 2026 sole traders and landlords with combined turnover over £50,000 must keep digital records and submit quarterly updates to HMRC via approved software. The threshold drops to £30,000 from April 2027. If you're near either threshold, pick software that's on HMRC's approved list.
The "I'm earning under £20k" answer
If you're earning under £20,000 with a handful of clients and a few categories of expenses, a Google Sheet with our free expense tracker plus our free invoice generator will do the job through Self Assessment. Add software when the admin starts taking more than an hour a week, or when MTD ITSA forces your hand.
Frequently asked questions
Related guides
Some links on this page are affiliate or referral links. If you apply through them we may receive a commission, at no extra cost to you. This does not influence our editorial recommendations — see our editorial policy and affiliate disclosure.
Information on this page is general guidance for UK small businesses and is not financial, tax or legal advice. Tax rules, allowances and product terms change. Always check current information with HMRC, Companies House or a qualified professional before making decisions.