Xero vs FreeAgent vs QuickBooks (UK)
An honest comparison of the three accounting tools most UK small businesses end up choosing between. Pricing, ideal user, the bits people complain about, and how to switch.
For most UK sole traders and freelancers: FreeAgent (free with NatWest/Mettle/Royal Bank business accounts). For most UK limited companies with an accountant: Xero. For multi-channel retailers and franchises: QuickBooks Online. All three are HMRC-recognised for Making Tax Digital (MTD).
Side-by-side
| Xero | FreeAgent | QuickBooks | |
|---|---|---|---|
| Starting price (Mar 2026) | From £16/mo (Starter) | £19/mo or free with NatWest/Mettle | From £14/mo (Sole Trader) |
| MTD for VAT | Yes | Yes | Yes |
| Self Assessment filing | Add-on | Included (sole traders & directors) | Add-on |
| Best for | Limited companies, accountants love it | Sole traders, freelancers, micro Ltds | Retailers, multi-channel sellers |
| Bank feeds | All major UK banks | All major UK banks | All major UK banks |
| Mobile app | Strong | Strong | Strong |
| Learning curve | Medium | Low | Medium-high |
| Common complaint | Project costing is bolt-on | Limited customisation | UI changes frequently |
Xero in depth
Xero is the default choice when you have an accountant. Almost every UK practice supports it, the bank feed coverage is excellent and the integration ecosystem (Hubdoc for receipts, Dext for documents, Stripe for payments, A2X for Shopify/Amazon) is the deepest of the three. The trade-off is price — the Starter plan caps invoice and bill volume, so most small businesses end up on Standard (around £33/month from late 2025), which adds up.
Pick Xero if: you have an accountant, you bill more than 20 invoices a month, you need reasonably sophisticated reports, or you plan to scale to multiple users and approvals.
FreeAgent in depth
FreeAgent is genuinely free if you bank with NatWest, Mettle, Royal Bank of Scotland or Ulster Bank — and it covers the bookkeeping cycle plus Self Assessment for sole traders and SA100 for directors. The UI is the friendliest of the three and the time-tracking is built in. The downsides: customisation is limited, multi-currency is basic and projects/jobs are simpler than Xero's.
Pick FreeAgent if: you bank with NatWest/Mettle/RBS (it's free), you're a sole trader or freelancer who hates spreadsheets, or you're a one-director limited company that wants Self Assessment included.
QuickBooks Online in depth
QuickBooks is the strongest of the three at multi-channel commerce, sales tax automation and inventory-light workflows. It owns most of the US market and that legacy shows: the UK localisation is solid but feels slightly less native than Xero or FreeAgent. The product team ships fast — sometimes too fast: UI and feature locations move around year to year.
Pick QuickBooks if: you sell through Shopify/eBay/Amazon at meaningful volume, you need integrated payroll and time-tracking, or you have a US arm and want one tool across both.
FreshBooks is fine for service-only freelancers but has limited UK accountant support. Sage 50 Cloud suits established small companies already on Sage. Pandle is genuinely free and lightweight but thin on integrations. Crunch bundles software + accountant for a monthly fee — useful if you want hand-holding, expensive if you don't.
Switching between them
Switch at year-end if possible. Steps:
- Run final reports in your old tool (Trial Balance, Aged Debtors, Aged Creditors, Bank reconciliation).
- Export your chart of accounts and customer/supplier list.
- Set up the new tool with opening balances matching the trial balance.
- Re-link bank feeds (you'll need to re-authenticate each bank).
- Run both in parallel for one month if you're nervous; otherwise stop the old subscription at the end of its billing month.
- Tell your accountant before you switch — not after.
Frequently asked questions
Related guides
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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.