Best free accounting software for UK small businesses 2026

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As a result of 57 hours of hands-on testing across seven top platforms, we determined that Zoho Books is the best free accounting software in 2026, thanks to its short learning curve and status as fully Making Tax Digital (MTD) for Income Tax compatible.

MTD is now reality for many sole traders and landlords, having begun on April 6th 2026, and the best way to keep HMRC happy is by using the best accounting software for your small business, like Zoho Books.

Free accounting software is going to be the most cost-effective route for keeping compliant, and this is why we consider Zoho Books the best option.

Comparison table: best free accounting software for 2026

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		Price from	Best for	Key benefits
FEATURED PROVIDER	OVERALL BEST
Xero	Zoho Books	FreeAgent	Clear Books	QuickFile	GnuCash	VT Cash Book
£7/month (+ VAT) 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 Open-source desktop software	Fast data entry with autocomplete Cash-basis accounting method Produce basic reports

Video: why Zoho Books is the best free accounting software

We explain everything you need to know about the Zoho Books’s free plan in three minutes:

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Cost of paid plans: £12 + VAT – £199 + VAT per month
MTD compatibility: fully compatible for both quarterly updates and end-of-year submissions
Bank feeds: you can connect one bank to Zoho Books free plan
Our full Zoho Books review

Zoho Books is the best free accounting software as it can handle both quarterly updates and end-of-year submissions for MTD for Income Tax, while remaining the easiest-to-use platform I’ve tested.

I found that navigating the Zoho Books interface was extremely straightforward, especially around invoices and quotes, which were highly intuitive. 

Expert opinion: Dan Heelan on Zoho Books

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

 Zoho Books has a clear, modern interface that makes navigation simple even for a novice user. Source: Startups.co.uk

The Zoho Books mobile app, which includes a receipt auto-scan feature, is a particularly helpful tool for a free plan, especially for sole traders who need to stay MTD compliant. If you’re at the petrol station, you can use the Zoho app to snap your receipt and instantly update your digital records.

What features are included in the Zoho Books free plan?

Zoho Books’s free tier also includes MTD VAT filing, VAT tracking, and comes with a range of helpful features for business owners including:

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

Best alternatives to Zoho Books for free accounting

Zoho Books is our top recommendation for free accounting software, but these are other free platforms you might find more suitable to your specific needs:

Clear Books: Best for a cheap upgrade path

Cost of paid plans: £5 + VAT – £44 + VAT per month
Bank feeds: automated bank feeds are not included on the free plan (you will need to upgrade to the £5 + VAT per month plan)
MTD compatibility: Clear Books supports quarterly updates, and are currently working on introducing end-of-year returns
Read more about Clear Books: in our guide to the best self-employed accounting software

Clear Books Sole Trader Free provides HMRC-approved MTD software for sole traders, the self-employed, and landlords, and you can upgrade to a paid tier when needed for just £5 + VAT per month.

Clear Books has a clean dashboard that’s a good fit for freelancers and solopreneurs who need a basic, free software that supports once-click quarterly updates to HMRC.

You can customise the Clear Books dashboard to display the metrics you feel are most important. Source: Startups.co.uk

Upgrading to at least the £5 + VAT per month tier will unlock useful features like receipt capture, customised invoices, quotes, and phone and email support, which will be worth the money to many sole traders. 

What features are included in the Clear Books free plan?

On the free Clear Books MTD for Income Tax software, you’ll be able to:

• Use the app to categorise income and expenses on the move
• Create invoice templates for clients
• Access profit and loss reports
• Export your data to a paid plan at any time

FreeAgent: Best for an impressive range of features

Cost of paid plans: £10 + VAT – £33 + VAT per month
Bank feeds: bank feeds are supported by FreeAgent
MTD compatibility: supports both quarterly updates and end-of-year tax return,  FreeAgent can offer a free MTD consultation, as well as a ‘Practice Portal’
Read more about FreeAgent’s MTD suitability: in our guide to HMRC-approved software for MTD

FreeAgent is a free, comprehensive accounting software for UK businesses that bank with NatWest, RBS, Ulster Bank, or Mettle (you need to make at least one transaction per month).

FreeAgent is incredible value for money if you can access a free account, being one of the few platforms that’s got built-in tools for tax forecasting and planning at no extra cost, with user-friendly templates, and overall simplicity that’s suited to new users.

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

We felt FreeAgent provided an impressive number of features without feeling too overwhelming for a novice user. Source: Startups.co.uk

We appreciated the useful tax timeline notifications, as well as FreeAgent’s detailed error box for your Self Assessment tax return, which prevents you from submitting incomplete data to HMRC.

What features are included in the FreeAgent free plan?

FreeAgent provides an impressive array of tools for a free option, including:

• Cash flow alerts that notify you about potential surpluses and shortfalls
• Customisable invoice templates
• Helpful end-of-year reports
• Simple-to-use invoicing timeline
• Help and support that includes live chat with both a bot and an actual human, and email support
• Includes the FreeAgent mobile app

QuickFile: Best for working in multiple currencies

Cost of paid plans: £60 + VAT per year
Bank feeds: automated bank feeds cost £15 + VAT per year
MTD compatibility: MTD-ready and can support both quarterly updates and end-of-year tax return, but MTD for Income Tax is only available on the paid tier

QuickFile is best for low-volume international freelancers due to the multi-currency support and unlimited users. I specify low-volume as the transaction limits will make QuickFile unsuitable for large volume business owners.

QuickFile for Mobile, available on both Android and iOS, is a useful feature for sole traders on the go, allowing you to snap receipts, create invoices and quotes, and manage multiple bank accounts directly from your smartphone.

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

Another strength of QuickFile is its versatility, suiting a range of business types, however, just keep in mind that MTD for Income Tax Self Assessment submissions are only on the £60 + VAT per year plan.

What features are included in the QuickFile free plan?

QuickFile’s free version has a list of other helpful features, including:

• Fully customisable and trackable invoices
• 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

GnuCash: For those with coding experience

Cost of paid plans: no paid tiers
Bank feeds: doesn’t support automated bank feeds
MTD compatibility: GnuCash does not support MTD

GnuCash is an open-source accounting software designed for micro-businesses with very few transactions, users with coding experience, and, crucially, those who do not require MTD support.

It will appeal to any who like an old-fashioned approach to bookkeeping, but its lack of suitability for MTD will make it a limited option in 2026.

While GnuCash is a hyper-simple desktop option, cloud accounting solutions that don’t require installation (like Zoho Books and FreeAgent) will offer much better longevity and efficiency for sole traders.

What features are included in the GnuCash free plan?

GnuCash is basic so you’ll be able to register incoming bills or import your downloaded bank statements, as well as the following:

• 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

VT Cash Book: Best for a traditional desktop solution

Cost of paid plans: £90 + VAT – £175 + VAT per year
Bank feeds: doesn’t support automated bank feeds
MTD compatibility: currently can only support quarterly updates on the paid version

VT Cash Book is a free desktop solution for businesses managing finances on a cash basis, rather than invoice dates.

The software exclusively tracks income that’s been received and expenses that have been paid. VT Cash Book functions as a manual ledger for recording your cash payments and receipts, but doesn’t have built-in VAT submission.

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

While VT Cash Book is designed to take manually inputted data and reconcile these statements with your accounts (so you can correct simple mistakes), just note that once you have your final profits, you won’t be able to submit a VAT return.

What features are included in the VT Cash Book free plan?

VT Cash Book lacks the advanced features of Zoho Books or FreeAgent, 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

How do I choose the right accounting software for my small business?

These are the key points to think about before you sign up for free accounting software:

• Scalability: look for plans that align with your financial goals as you may outgrow a basic option like GnuCash quickly, whereas Zoho Books can support long-term growth.
• Accounts payable: look 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.
• Accounts receivable: opt for no-cost accounting software that facilitates smooth invoicing, helps track customer payments, and provides reminders for overdue invoices.
• Financial reporting: access to real-time insights leads to informed decision-making and will be needed when it comes to preparing your tax return.
• Integrating third-party applications: while this can sometimes be locked away on paid plans, many providers (like Zoho Books) will allow you to plug other applications even at the free level.
• Mobile apps: a user-friendly app lets you access key financial information and perform essential tasks anywhere.
• Data portability: you might have signed up for a free plan in the MTD rush, but then find you grow out of it quite quickly. Look for providers that allow you to seamlessly export your data to a premium plan.
• Payroll: free plans won’t include payroll functionality, so make sure you factor this in as an additional cost during budgeting.

Data security

Our top recommendation, Zoho Books, protects your data with multi-factor authentication (MFA) via methods including Passkeys, and its own authenticator app Zoho OneAuth.

Digital tax data is a target for scammers in 2026, so it’s crucial to select a platform with strong cybersecurity.

What is audit trail security, and why is it important?

Audit trail security provides a clear timeline of all actions performed in your accounting software, for enhanced security and accountability.

Our top free software recommendation, Zoho Books, provides a tamper-proof audit trail and end-to-end encryption.

How we test and review free accounting software

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

We tested each software against the same six criterion:

1. What core accounting features are included? (20%): we looked at the capability of the basic functions of the platform, like invoicing and quoting, syncing multiple bank accounts, bank reconciliation, and if it could process payments.
2. How well does the software help me plan financially? (17.5%): we analysed the software’s capability for providing financial reports, and if it could assist with tacking monthly bills and expenses.
3. Does the software enhance my operational efficiency? (17.5%): we researched the capability to connect third-party applications to make bookkeeping more efficient, and if the platform supported customisation.
4. Does it include customer support? (15%): we analysed the different areas of customer support included in the free plans.
5. How much does it cost if I need to upgrade? (15%): free plans can be outgrown quickly, so we assessed the cost of the premium tiers of the platform, and investigated any hidden fees.
6. Is it easy to use? (15%): we completed a total of 37 user tests during our hands-on assessment of the platform interface, to see how short the learning curve will be for sole traders.

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 testing sessions to bring you the most helpful and comprehensive list of the best free accounting software for your small business in 2026.

Are there free options for Making Tax Digital for Income Tax 2026?

There are several free options for Making Tax Digital for Income Self Assessment (MTD for ITSA): 

• Zoho Books: incredibly easy-to-use accounting software and a great choice if you need an intuitive platform that’s quick to learn.
• FreeAgent: if you do qualify for a free FreeAgent account with your bank, this is the most effective way to stay MTD-compliant at no cost.
• Sage: Sage provides Sage Individual Free, which is MTD-ready, and allows you to create and send five invoices per month.
• Clear Books: a free MTD for income tax software for the self-employed, sole traders, and landlords.

If you’d like to know more about what you need to do to be MTD-compliant, you can consult our full guide to Making Tax Digital. Regardless of which software option you choose, we would heavily recommend checking with HMRC directly that it is MTD-approved. You can do this with the MTD finder tool at gov.uk.

Which free plans are not suitable for MTD for ITSA?

GnuCash and VT Cash Book (the free version) do not support MTD, and they cannot be used for MTD for ITSA without upgrades and coding, like bridging software.

Verdict what’s the best free accounting software?

Zoho Books is the best free accounting software thanks to its modern design, easy navigation, and impressive range of functionality for a free tier. The range of premium plans will also help you avoid the headache of having to export your data when you outgrow a free plan.

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.