Best free accounting software for UK small businesses 2025

While you might think you’ll need to open the chequebook to get the best accounting software for small businesses, you can actually get some excellent options completely free. Based on our extensive analysis, Zoho Books is the best free accounting software for 2025. 

Did you know that almost half of sole traders don’t know about Making Tax Digital? This time next year MTD will be mandatory for many self-employed individuals, and yet many are unprepared. 

The good news is that even though Zoho Books has a free plan it’s still MTD compliant. It also gives solopreneurs everything they need for efficient accounting, while also retaining a user-friendly design. But there are also a number of other free accounting software platforms on the market, so read our roundup below to find out which is the best fit for your business.

The best free accounting software: comparison table

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FEATURED PROVIDER	OVERALL BEST
Xero	Zoho Books	FreeAgent	QuickFile	GnuCash	VT Cashbook
Price From £16 per month (excl. VAT) £1.60 per month (excl. VAT) for the first six months	Price From Free	Price From Free with a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account.	Price From Free	Price From Free	Price From Free
BEST FOR Best for more experienced accountants and established businesses that need more than just the basics	BEST FOR Best for managing your inventory and sales, and for those who need an on-the-go software for real-time financial management	BEST FOR Best choice for budget-conscious businesses seeking simple yet effective tax forecasting and scenario prediction tools	BEST FOR Small businesses that trade overseas	BEST FOR Businesses that need a desktop solution	BEST FOR Businesses looking for simplicity
Key Benefits Slick design Insightful reporting 24/7 online support	Key Benefits File MTD VAT returns 1,000 invoices per year Auto-scan receipts	Key Benefits Cash flow alerts Great support for tax preparation Provides FreeAgent mobile app	Key Benefits Bank feed integration MTD VAT filing Customer portal	Key Benefits Generates PDF invoices Chequebook-style interface Open-source desktop software	Key Benefits Fast data entry with autocomplete Cash-basis accounting method Produce basic reports
Try Xero	Compare Deals	Compare Deals	Compare Deals	Compare Deals	Compare Deals

Zoho Books: best overall

In our video guide to Zoho Books, our in-house Research Executive Olivia Bond explains everything you need to know about the platform’s free plan in three minutes:

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Why is Zoho Books the best free accounting software?

Zoho Books is the most user-friendly accounting software I’ve tested, it’s easy to understand, has an appealing design and packs an impressive level of functionality for a free plan: including MTD VAT filing, VAT tracking, and the ability to create invoices and quotes.

The free plan is limited to one user, but it’s ideal for sole traders, solopreneurs, and micro businesses that can’t quite justify the cost of paid software. It’s also our top choice for a self-employed accounting software.

More key features you get on the free tier:

• A customer portal
• A mobile app for auto-scanning receipts
• Bank reconciliation
• A detailed dashboard with helpful reporting
• Mileage tracking
• Automated payment reminders 
• Auto-scan receipts 
• Take online payments

The free plan includes 1,000 invoices a year. This makes it a great option for new businesses that are taking more than 100 transactions per year, and need to graduate beyond just a simple spreadsheet. Though it’s less ideal for those in the service industry, as you’ll most likely be exceeding this amount of transactions annually.

Zoho Books also continues to add features – it has announced that MTD for Income Tax and the ability to prepare for Self Assessment (SA103F) will both be available on the free plan in the future.

This will be your home dashboard when using Zoho Books. Source: Startups.co.uk

What are the drawbacks?

• Zoho Books’ branding will appear on all your invoices on the free tier.
• The free tier is also missing out on some more advanced functionality, like multi-currency support, which FreeAgent provides. So if you qualify for FreeAgent’s free tier, this will be a better option for your needs. 
• It’s only free if your revenue falls under £35k for the financial year. If your revenue exceeds this threshold, you’ll be made to join a paid tier.

What our Reviews Writer thought

When I used Zoho Books for myself, I found it so simple and easy to use. Even as someone whose background is not in accounting, I found it to be naturally intuitive, and completing tasks was a cinch.

Eddie Harris Reviews Writer

What other free accounting software is available?

Zoho Books might be our top recommendation for free accounting software, but there are other free platforms available that you might find are a better fit for your specific needs.

FreeAgent: great for tax forecasting… if you qualify for a free plan

Key information such as your cashflow will be displayed on the FreeAgent dashboard. Source: Startups.co.uk

Despite the name, FreeAgent is only free if you have a business account with any of the following banks:

• NatWest
• Royal Bank of Scotland
• Ulster Bank
• Mettle (and make at least one transaction per month)

If this doesn’t apply to you, you can check out any of the other providers we’ve included in this roundup.

What can FreeAgent’s free plan do?

Crucially, FreeAgent is one of the few platforms that’s got built-in tools for tax forecasting and planning at no extra cost. So if you qualify for a free account, we’d recommend FreeAgent to freelancers, sole traders, and novice accountants who want a simple, easy-to-use accounting platform, that’s got some great tax tools.

The user-friendly invoice and estimate templates, combined with the detailed end-of-year reports, can really streamline your operation. You’ll also get a number of tools for time tracking, payroll, cash flow alerts and more. It packs a lot into its toolkit, but not so much that it would be overwhelming for the less experienced user.

What are the drawbacks?

• I found the layout to be slightly disorganised and unintuitive, especially in comparison to Zoho Books.
• I had trouble locating certain features, like payment reminders and currency settings.
• Once again, I need to flag that unless you currently have a business account with one of the qualifying banks we listed above, you won’t be able to access FreeAgent for free (pricing starts at £9.50 per month for sole traders). It’s a big prerequisite that our first choice, Zoho Books, doesn’t have.

QuickFile: versatility for a range of businesses

Quickfile’s dashboard for invoicing, banking and important notes

What can QuickFile’s free plan do?

QuickFile offers an impressive range of features to help out with your bookkeeping and accounting, including:

• Fully customisable and trackable invoices
• Unlimited users
• Ability to create estimates and quotes
• An online portal where your clients can view and pay invoices
• File VAT Returns directly to HMRC
• You get multi-currency support, something our top choice Zoho Books doesn’t provide on the free tier 
• 2-Factor authentication for added security 

You also get the QuickFile mobile app, which is really handy, especially for side-hustlers who need to snap and upload receipts on the go. It also helps you separate out your personal and work finances, if you don’t have a business account.

QuickFile provides a range of different tiers to support different business sizes, but just keep in mind that if you go beyond the Medium tier, it’s no longer free.

What are the drawbacks?

• The ledger limit: up to 1,000 entries are covered for free, but if you go over then you’ll be charged £60 plus VAT per year.
• Automated bank feeds also come at an additional cost of £15 plus VAT per year.
• If you’re using the free version of QuickFile, you won’t be able to integrate any third party software.
• Bulk invoice entry is also only available on the paid tier, as is the ability for cryptocurrency tracking (most of these features won’t be necessary if you’re just using the software to file tax returns or do basic bookkeeping for your side hustle).

GnuCash: for those with coding experience

GnuCash is a strong, completely free option for basic data entry and tracking your income and expenses.

What can GnuCash do?

GnuCash is best for basic data entry. It’s open-source, meaning anyone can download and edit the programming code. You can add extra functionally, and patch up errors… but only if you’ve got the technical know-how. So unless you’re a software whizz with coding experience, GnuCash won’t be for you.

A micro business can use it to manage a limited amount of transactions, which it does via double-entry accounting: every transaction is recorded as a debit to one account and a credit to another. You’ll be able to register incoming bills or import your downloaded bank statements, and then:

• Automatically add VAT to sales invoices
• Add tax information to sales invoices (including for clients based abroad)
• Generate a PDF invoice to send to clients
• Build reports to track profits and losses or business overheads

What are the drawbacks?

• GnuCash works in accrual-mode, meaning it records expenses and sales as they take place, rather than at the point when an invoice is settled.
• While this is actually a smarter way of keeping track of your transactions, it’s not ideal for solopreneurs and sole traders as you have to make fiddly manual edits if payments are late.
• Accrual method makes things simpler by eliminating the need to chase outstanding invoices or account for pre-paid expenses, but it’s less ideal for firms with large sales volumes, as it can lead to issues like mismatched revenue.
• If you’re not a coding aficionado, you’ll struggle with GnuCash – a beginner will have a much easier time with Zoho Books.
• There’s no open banking integration, no mobile app, and crucially, it doesn’t support payroll functionality.

What can VT Cash Book do?

VT Cash Book is a straightforward, easy-to-use free desktop accounting software. But it’s only suitable if you want to manage your finances on a cash basis, rather than invoices. The software exclusively tracks income that’s been received and expenses that have been paid.

The software is mainly useful as a way of recording your payments and receipts. It might be short on advanced features (both Zoho Books and FreeAgent come with a much wider suite of tools), but you’ll be able to perform basic actions like:

• Run limited reports on profit and loss
• Display balance sheets
• Perform ledger activity
• Create transaction lists

What are the drawbacks?

• Because it’s entirely focused on managing businesses on a cash basis, VT Cash Book’s free plan has no invoicing features for overseeing payments from clients and to suppliers. 
• While it’s designed to take manually inputted data and reconcile these statements with your accounts (so you can correct simple mistakes), once you have your final profits, you won’t be able to submit a VAT return.
• You’ll have to pay extra for a VT Transaction+ license in order to access MTD for VAT features, and create a VAT return.

Buying guide: how to choose the right accounting software for your small business

There’s more than meets the eye when it comes to picking free accounting software for your business.

It might seem like a low-risk endeavour as you won’t be laying out a financial investment, but there will be a time investment. You don’t want to slow down your operation by picking the wrong platform, just because it’s free.

Here are our top eight things to think about before you sign up for free accounting software:

1. Pricing (for the future): you might be fine with a free plan for the moment, but what if your side hustle spirals into a full-time business? Think about the scalability of the software as your business grows. Look for plans that align with your financial goals.
2. Bookkeeping capability: the core function of any accounting software is efficient bookkeeping. Look for free software that simplifies the recording and categorisation of transactions.
3. Accounts payable: managing payments is crucial for SMEs and solopreneurs alike. Keep an eye out for free tiers that still offer features that streamline invoice processing, support timely payments, and provide insights into cash flow.
4. Accounts receivable: opt for no-cost accounting software that facilitates smooth invoicing, helps track customer payments, and provides reminders for overdue invoices.
5. Financial reporting: you can still find free software platforms that offer you customisable reports. Access to real-time insights leads to informed decision-making and savvy financial planning.
6. Integrations: seamless integration with third-party software enhances efficiency. While this can often be locked away on paid plans, providers like Zoho Books still offer integrations with software like Zapier and Google Workspace on a free tier.
7. Mobile apps: a user-friendly app lets you access key financial information and perform essential tasks anywhere; highly valuable for SME owners on the move. You can find free options for mobile apps, like with Zoho Books and QuickFile.
8. Help and support: live chat, forums, and phone and email support help you and your team to find solutions to software issues or queries quicker. Unfortunately, support channels can often be limited on free plans, but they can be critical for those less experienced who need extra help.

Our methodology: how we test free accounting software for UK small businesses

At Startups, it’s important to us that the software recommendations we make to small UK businesses are useful, accurate, and based on thorough product testing.

Both Zoho Books and FreeAgent were part of our latest round of exhaustive testing. This involved data-led analysis, in conjunction with 57 hours of user testing across 1,512 total areas of investigation.

Our other recommended free platforms – QuickFile, GnuCash and VT Cash Book – fell under a previous, separate round of testing. All in all, we covered four main categories of investigation and 24 subcategories during this testing process. I then fact-checked this information to ensure it was still relevant and up-to-date.

I combined the results of both of these rigorous testing sessions in order to bring you the most helpful and comprehensive list of the best free accounting software for your small business in 2025.

In summary

Zoho Books is the best free accounting software thanks to its modern design, easy navigation, and impressive range of functionality for a free tier. Just keep in mind that you’re limited to 1,000 invoices per year, so if you’re likely to exceed that, you’ll need to consider a paid tier.

Alternatively, if you want to work in accrual mode, and you’re a bit of software whizz, you might feel you’d be more suited to GnuCash’s open source bookkeeping.