Best free accounting software for UK small businesses 2026

1 of 3

Xero: limited time – 90% off for 4 Months

See Pricing

2 of 3

Sage: try out an AI-powered assistant FREE

See Pricing

3 of 3

Compare software deals to find the best option

Compare Costs

As a result of our latest research, involving 57 hours of hands-on testing across seven top platforms, we determined that Zoho Books is the best free accounting software for 2026. So, while you might think you’ll need to start spending to get the best accounting software for small businesses, you can actually get some excellent options completely free.

Making Tax Digital (MTD) for Income Tax will be mandatory very soon for many self-employed individuals. MTD will start to be phased in from April, and yet many are still 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

0 out of 0

• backward
• forward

		Price from	Best for	Key benefits
FEATURED PROVIDER	OVERALL BEST
Xero	Zoho Books	FreeAgent	Clear Books	QuickFile	GnuCash	VT Cash Book
£7/month (+ VAT) Get 90% off for 6 months	Free	Free with a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account.	Free	Free	Free	Free
Expanding businesses that need a software that can grow alongside them	Best overall free accounting software option	A wide range of features (if you qualify for a free plan)	Sole traders, the self-employed, and landlords needing a reliable software for MTD returns	Those needing to use multiple currencies on a free plan	Those with coding experience	Cash-based businesses wanting a desktop solution
Slick design Insightful reporting 24/7 online support	File MTD VAT returns 1,000 invoices per year Auto-scan receipts	Cash flow alerts Great support for tax preparation Provides FreeAgent mobile app	Free MTD for income tax plan for the self-employed, sole traders and landlords Unlimited transactions Secure data protection	Multi-currency support MTD VAT filing Customer portal	Generates PDF invoices Chequebook-style interface Open-source desktop software	Fast data entry with autocomplete Cash-basis accounting method Produce basic reports
Try Xero	Compare Deals	Compare Deals	Compare Deals	Compare Deals	Compare Deals	Compare Deals

I last updated this article on 19/12/2025

I frequently review and update our recommendations to make sure they’re as up-to-date and accurate as possible. I verified all the information and pricing in this article as correct as of this date, but given the competitive nature of the accounting software industry, I always recommend verifying directly with software providers before making a buying decision.

Loading

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 self-employed accounting software.

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 number of transactions annually.

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

Zoho Books also continues to add features – with MTD for Income Tax and the ability to prepare for Self Assessment (SA103F and SA103S) both now available on the free plan, having been rolled out in June 2025.

What are the drawbacks?

• You’ll be capped on invoices (for example, 1,000 sales invoices or 1,000 purchases) so if you think you’ll exceed this limit the free plan won’t be for you. Zoho Book’s free plan is only a viable solution if your activity levels are modest.
• 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 £35,000 for the financial year. If your revenue exceeds this threshold, you’ll be made to join a paid tier.

Expert opinion: Dan Heelan on Zoho Books

Whilst some of the terms used in the product may feel a little ‘Americanised’ for a UK business owner, the software is quick and easy to use. If you like the idea of some of the other Zoho apps that can plug into this, it can be a really powerful tool. If you are a service-based freelancer issuing a handful of invoices a year, this is a solid choice. On the other hand, if you are a business issuing lots of invoices you are likely to hit the plans cap quickly and will need to evolve onto a paid plan.

Dan Heelan Accountant and Business Services Director at Heelan Associates Ltd

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.

Clear Books: for sole traders, the self-employed, and landlords needing a reliable software for MTD returns

On Clear Books’ free plan, you get both a desktop and mobile app version. Source: clearbooks.co.uk

What can Clear Books’ free plan do?

In 2025, Clear Books introduced a new, completely free software plan. Called MTD Income Tax, the plan is a no-cost tier designed for the self-employed, sole traders and landlords. You can run the free plan on a desktop or mobile app, so you can easily categorise income and expenses on the move.

Unlike Zoho Books’ free plan, which is only available if your revenue for the financial year falls under £35,000, Clear Books has no stated revenue limit and no transaction limit, so in this respect it can be used by anyone.

With this free MTD for Income Tax software, you’ll also be able to:

• Submit quarterly updates to HMRC with one click
• Link your bank feeds with automated matching
• Create invoice templates for clients
• Access profit and loss reports

With MTD for Income Tax becoming mandatory for sole traders, landlords and the self-employed in 2026, this free plan from Clear Books is an attractive option to fulfil some basic bookkeeping needs.

What are the drawbacks?

• With Clear Books’ free tier, you can’t send estimates or quotes, whereas you can on Zoho Books’ free plan.
• You can’t customise invoices on the free plan (you’ll need to upgrade to at least the £5 tier for this).
• Provided you qualify for its free plan, FreeAgent comes with detailed tax forecasting tools, which are lacking on Clear Books’ free plan.
• Zoho Books’ free plan includes a customer portal for your clients to use, which is missing from Clear Books’ no-cost plan.

FreeAgent: great for a wide range of features… 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, I’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. FreeAgent could also be used by limited companies, something Clear Books’ free plan wouldn’t be suitable for.

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 with Zoho Books.
• Some of our users 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.

Expert opinion: Dan Heelan on FreeAgent

If you bank with NatWest, Ulster Bank, Royal Bank of Scotland or Mettle, and are looking for free accounting software, this is the best deal out there. You get a fully-fledged version of the software for free, whereas the other free plans are capped, and limited in places. Super powerful, feature-packed software – for free.

Dan Heelan Accountant and Business Services Director at Heelan Associates Ltd

QuickFile: for those needing to use multiple currencies on a free plan

QuickFile’s dashboard for invoicing, banking and important notes. Source: Startups.co.uk

What can QuickFile’s free plan do?

QuickFile’s standout offering is the multi-currency support, which is something our top choice Zoho Books doesn’t provide on the free tier. QuickFile also provides an impressive range of other 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
• Two-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).

Expert opinion: Dan Heelan on QuickFile

The 1,000 ledger entry cap makes QuickFile a difficult choice. Ledger entries include invoices, bills and bank statement lines so it’s extremely easy to reach the cap. Having to pay for an automated bank feed is also something that’s highly unusual in an accounting app in 2026.

Dan Heelan Accountant and Business Services Director at Heelan Associates Ltd

GnuCash: for those with coding experience

GnuCash is a strong, completely free option for basic data entry and tracking your income and expenses. Source: Startups.co.uk

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.

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 smart way of keeping your business numbers, it’s not ideal for sole traders who may want to maintain a ‘cash basis’ set of records for their tax return, based on when things were paid.
• 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 simple, free desktop accounting software, but it’s only suitable if you want to manage your finances on a cash basis, rather than invoice dates. 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.

Expert opinion: Dan Heelan on VT Cash Book

Whilst I am a fan of VT, particularly its bigger brother that accountants often use to prepare accounts, desktop solutions are hard to recommend in 2026. If you must have a desktop solution, VT is a solid choice. But if you can, grab an online (cloud) application.

Dan Heelan Accountant and Business Services Director at Heelan Associates Ltd

How do I choose the right accounting software for my 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 small businesses and solopreneurs alike. Keep an eye out for free or low-cost tiers that give you the ability to add ‘bills’. You will then be able to see a list of people your business owes money to.
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 basic reporting functions. Access to real-time insights leads to informed decision-making and will be needed when it comes to preparing your tax return.
6. Integrations: being able to seamlessly connect your accounting software with third-party applications enhances efficiency as you grow. While this can sometimes be locked away on paid plans, many providers will allow you to plug other applications in at every plan level.
7. Mobile apps: a user-friendly app lets you access key financial information and perform essential tasks anywhere. This is highly valuable for small business who find themselves rushing around. You can find free options for mobile apps with most online accounting applications.
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 with less experience who need extra help.
9. Cloud accounting: if you can, be sure to choose an online accounting solution. The key benefits being:

• Accessible anywhere with a browser
• Not backups needed
• No software installation
• Banks typically can transmit data into it
• Mobile apps usually available
• Great way to collaborate with an accountant

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.

Zoho Books, Clear 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 is 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 2026.

In summary: what’s the best free accounting software?

Provided you don’t qualify for a free account with FreeAgent, then 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.

If you are able to get a free plan with FreeAgent (by opening a qualifying business bank account) then this is incredible value for money. You get a fully-fledged accounting software for free, so you won’t be held back by the caps and limitations normally associated with a free plan.