Best free accounting software for small businesses in 2022

Accountancy software can make running your business quicker, simpler, and easier, and there are some great free solutions out there. Check out the options here, and find the right fit for your business.

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Key Benefits

Zoho Books



Wave Accounting


VT Cashbook


Free (for Natwest/RBS business banking customers)




Our top overall pick

Small businesses that trade overseas

RBS/Natwest customers

Free invoice creation

Businesses that need a desktop solution

Businesses looking for simplicity

  • Create and send invoices
  • MTD VAT filing
  • Expenses & mileage tracking
  • Bank feed integration
  • MTD VAT filing
  • Multi-currency support
  • Corporation tax forecasting
  • Project tracking
  • Time tracking tools
  • Personalised invoice creation
  • Powerful business reporting
  • Sort income and expenses into tax categories
  • Completely free
  • Checkbook-style interface
  • Open-source desktop software
  • Fast data entry with autocomplete
  • Track multiple bank/cash accounts
  • Produce basic reports

Our No. 1 overall pick for best free accounting software is Zoho Books, which offers a 100% free plan that does the basics well but lacks important features such as bank feeds.

Other options to consider are Quickfile, which is only free for companies of a certain size and FreeAgent, which RBS/Natwest business banking customers can use free of charge.

For these recommendations, we’ve used our more than 20 years of small business experience to take a look at all the free accounting software options available and tell you which could be a good fit for early-stage businesses that need to carefully account for every penny. We based these choices on ease of use, features, design, scalability, suitability for the UK taxation system, and suitability for various kinds of businesses.

To learn more about the differences between free and paid accounting software, and the top contenders in both categories, read on.

Of course, all free accounting software comes with caveats and drawbacks – they are free for a reason after all. So, while there are some reasonable options out there, first make sure you have a careful think about whether you should spend (just a little) to find the perfect accounting software for your business.

Best Free Trials to Accounting Software

Before discounting paid-for software altogether, take a moment to consider the all-singing, all-dancing accounting software offerings from the dominant major players.

Many will have a generous free trial, and surprisingly low ongoing costs that make for a smart investment as your business scales and grows:

Compare providers and save Do you use accounting software?

Best accounting software with a free trial

In the section below, you can compare the UK's most popular accounting software for small businesses.

We understand why completely free-for-life software can seem appealing; but ultimately, their heavy functional limitations mean they won't be a good long-term solution for your business. For as little as £11 a month, you can use a premium product that will help you run, grow and scale.

Plus, each of our top choices offers a 30-day free trial, so you can confidently try them out, and make sure they're a good fit for your business before you commit – risk free!

To get a sense for how one of the UK's best full-fat, premium accounting software products could help your business, it's definitely worth signing up for a 30-day free trial.

The list above shows some of the UK's most popular accounting software providers, each of which offers a free month so you can get a proper idea of how it works and what it does.

Best free accounting software UK

Here, we break down our picks for best free UK accounting software, explaining the pros and cons of each option.

Zoho Books

Zoho Books accounting software for small businesses

  • Powerful features (though the best ones are paid for)
  • Cloud-based, works on web browser, mobile and tablet
  • Colourful, intuitive interface
  • Limited to 1,000 invoices per year
  • Lacks key features
  • Only free for businesses with annual turnover under £35k

What is Zoho Books?

Zoho made its name with its CRM systems (check out our Zoho CRM review to learn more) but it has offered accounting software since 2011. Zoho Books’ free plan is the best overall choice for free accounting software, though things improve further if you pay out for a premium tier.

It combines a simple and intuitive interface with powerful features that means, even on the free tier, Zoho Books effortlessly handles all the basics.

In short, it’s a great choice for businesses just starting out.

What can Zoho Books do?

On the free tier, Zoho Books offers all this:

  • Create, customise and send invoices (up to 1,000 per year)
  • MTD VAT filing
  • Automated payment reminders
  • Expenses & mileage tracking
  • Create business reports
  • Run an audit trail
  • Produce recurring invoices
  • Integrate with other Zoho apps and other apps like GSuite, Office 365 and Dropbox
  • Email support

Why is Zoho Books free?

Zoho offers a free plan, but of course, there are drawbacks. For one, it’s limited to 1,000 invoices per year, and lacks a number of features that can make a huge difference to the level of debt in which accounting software can help your small business.

You'll also be automatically upgraded to a paid plan if your annual turnover exceeds £35,000.

We’ve taken a closer look at how Zoho’s free plan matches up to its £12 per month (+VAT) Standard plan below:

Zoho Books Free vs Standard

While Zoho’s free plan is very useful for businesses just starting out, there are some big reasons you should consider signing up for the Standard plan.

Most notably, the Standard plan lets you create up to 5,000 invoices per year, as opposed to just 1,000 for the Free plan. This means that Zoho Free won’t be suitable for businesses with high transaction volumes, and SMEs with serious growth plans should go for a paid plan.

Another key point is that Zoho Standard comes with bank feed integration. What this means is that once you’ve linked your business bank account, any transactions you make will automatically appear in Zoho Books. With Zoho Free, you’ll have to download and import bank transactions, an annoying and time-consuming task when you’re busy running your business.

On a paid tier, you’ll also be able to create recurring expenses, add up to three users, track project expenses, use a larger number of payment gateways, integrate with other services including Uber and Zendesk, and get support via voice and chat.

So, while the Free plan definitely has its plus points, the extra features and higher limits of Zoho Standard make it a very persuasive option for UK small businesses.

When comparing them, make sure you consider just how much time and effort you’d save with the Standard plan – letting you get on with growing your business.

If your business has more complex needs or requires higher limits, Zoho also offers the Professional (£24 per month +VAT) and Premium (£30 per month +VAT) plans.

You can see how all four Zoho Books plans stack up below:

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£12 a month (excl. VAT)

£24 per month (excl. VAT)

£30 per month (excl. VAT)

  • Manage up to 1,000 invoices per year
  • MTD VAT filing
  • Expenses & mileage tracking
  • Manage up to 5,000 invoices
  • Automatically import transactions
  • Add recurring expenses
  • Bill management
  • Multi-currency handling
  • Retainer invoices
  • Track activity across multiple branches
  • Custom domain
  • Custom reports

What support does Zoho Books offer?

On the Free plan, Zoho gives support via email, while its paid plans add assistance via voice and chat.

Zoho Books Verdict

With loads of powerful features and a great interface, Zoho Books Free is the perfect free accounting software for businesses just starting out. The integrations with Zoho’s other leading business apps are the icing on the cake, but SMEs who are serious about growth should consider going for a paid Zoho plan.


Quickfile dashboard (best free accounting software)

  • Great range of features
  • Responsive support community
  • Cloud-based, works on web browser, mobile and tablet
  • Fee applies for larger accounts
  • Free version is supported by ads
  • Fairly basic visuals

What is QuickFile?

Founded in 2010, QuickFile is accounting software that’s specifically aimed at freelancers, small businesses, and entrepreneurs. It’s a simple and intuitive cloud-based solution that helps any small business owner with little accounting knowledge to easily keep track of their finances.

It’s also got great reviews on Trustpilot, amassing an average score of 4.7 out of 5 from over 1,100 reviews, with reviewers praising its ease of use and range of features.

What can QuickFile do?

QuickFile boasts an enviable range of features, including:

  • Integration with over 50 automated bank feeds
  • Easily manage invoices through a branded portal, which your clients can use to view and pay invoices through a range of online payment providers like PayPal and Stripe
  • Track and file VAT returns – QuickFile is fully compatible with Making Tax Digital
  • Generate a range of reports that give insight into your business
  • Full multi-currency support
  • Tools to create estimates, purchase orders, and delivery notes
  • A mobile app that allows you to create invoices/estimates and snap expenses receipts on the go
  • A seamless ‘click to print’ service if you need to post hard copies of your invoices, estimates, or statements

Why is QuickFile free?

QuickFile is only free for accounts of a certain size. This is slightly technical, but you’re limited to 1,000 ledger entries (this includes all invoices, purchases and bank transactions). Once you go over this limit, you pay a set fee of £45+VAT per year (approximately £54 in total at current rates).  Moreover, this fee grants you access to some advanced features, such as enhanced bulk invoice entry and VAT bridging tools.

The free version is also supported by ads.

This pricing structure makes it perfect for startups – who can upgrade as their business grows – and means that you can easily try QuickFile for free to see if it’s the right fit for your business.

What support does QuickFile offer?

While there is no phone support available, QuickFile has a very active online community forum, and promises to answer most questions posted there within a few hours. You can also email their support team directly, but you’re likely to get a quicker response by posting a question in the forum.

QuickFile Verdict

QuickFile is the ideal free solution for very small businesses that can stay under the ledger entry limit. Its highly competitive pricing and great range of features means it should also be strongly considered by larger businesses, too.


FreeAgent screengrab (best free accounting software)

  • Powerful cloud-based accounting software with a huge range of features
  • Free for Natwest/Royal Bank of Scotland (RBS) business banking customers
  • Dedicated phone and email assistance from UK-based support accountants
  • Your bank will have access to your detailed financial data

What is FreeAgent?

Set up in 2007, FreeAgent is now used by over 90,000 small businesses across the UK, who use it to keep track of their finances, expenses, invoices, estimates, and more. It boasts some great advanced features, like automatically generated VAT returns, corporation tax forecasts, and self-assessment tools that automatically fill in up to 90% of the self employment tax return form. It has also won awards (it was named the Small Business Accounting Software of the Year at the 2018 Accounting Excellence Awards, for example), and has an average rating of 4.7 out of 5 (from nearly 1,000 reviews) on Trustpilot.

For most users, though, all this comes at a cost (see the “why is FreeAgent free” section for full details). The reason FreeAgent is being discussed here is that it was bought by RBS in March 2018 for £53m, and it is now being offered for free to RBS/Natwest business banking customers.

This equates to a saving of at least £150 a year, and so is very tempting for small business owners. However, the small print makes it clear that taking up this option means your bank will be able to see exactly what’s going on with your accounts, so carefully consider whether you want to give them access to your detailed financial data in return.

What can FreeAgent do?

FreeAgent’s huge range of features includes:

  • Tools to create and send professional estimates and invoices
  • Time tracking tools so you can easily create smart timesheets
  • Powerful HMRC integration that makes doing your tax return a doddle
  • Automatic creation of VAT returns
  • Corporation tax forecasting
  • A dashboard that lets you easily monitor your cash flow
  • Automatic importation of bank transactions
  • A projects view that clearly shows the income, time, and expenses associated with each project, and whether it’s making a profit or loss
  • A fully featured mobile app that allows you to snap receipts, create invoices, track time, manage payments, and see your accounts on the go

Why is FreeAgent free?

As stated above, FreeAgent is only free for RBS/Natwest business banking customers.

For everyone else, the standard pricing is as follows:

  • Sole trader – £19+VAT per month – includes self-assessment filing tool
  • Partnership/LLP – £24+VAT per month – includes profit share calculation tool
  • Limited company – £29+VAT per month – includes self-assessment filing, dividend vouchers, and corporation tax forecasting tools

All plans have a 30-day free trial.

If you are an RBS/Natwest business banking customer, then you can get FreeAgent for free. However, remember that you are giving up something valuable in exchange – your financial data. Quite what your bank intends to do with this is not yet clear, but make sure you consider how this might affect you before signing up, and discuss this decision with your accountant if you have one.

What support does FreeAgent offer?

FreeAgent offers excellent customer service, with help available from UK-based support accountants via phone and email during business hours (9am-5pm Monday to Friday). The website also has lots of resources that explain things like expenses, invoices, and VAT filing.

FreeAgent Verdict

As a product, FreeAgent is a great solution for small businesses – it’s got loads of powerful features, and responsive customer support if you get stuck. Getting all this for free as an RBS/Natwest business banking customer is very tempting, but make sure you consider the potential consequences of giving up access to your detailed financial data in return.

Wave Accounting

Wave (best free accounting software)

  • Powerful accounting software that's completely free
  • Handy mobile app
  • Cloud-based, works on web browser, mobile and tablet
  • US/Canada focus limits UK functionality
  • No MTD support

What is Wave Accounting?

Founded in 2010 in Toronto, Canada, Wave Accounting is powerful, free, cloud-based accounting software that has a great UI and a slick marine design scheme. It makes its money by selling payroll and payments services (alongside display ads), which means its free accounting software is pretty much unlimited in terms of account size etc. All this means Wave Accounting is beloved by US startups, but its US/Canada focus means it’s not an ideal fit for UK small businesses – and some may find it a non-starter for this reason.

What can Wave Accounting do?

Wave Accounting’s great range of features includes:

  • Tools to create and send professional invoices, even on the go
  • Unlimited income and expense tracking
  • Keep digital copies of your receipts via an iPhone/Android mobile app
  • Create and export a range of accounting reports
  • Multi-currency support with automatic exchange rate calculations
  • A smart dashboard that organises income, expenses, payments, and invoices
  • As well as receipt snapping and invoice creation, the mobile app allows you to easily keep track of your accounts on the move

Why is Wave Accounting free?

As mentioned above, Wave Accounting makes its money by displaying ads, and most importantly, by selling payments and payroll services. These services are targeted at US/Canadian customers, with the payroll service being exclusive to those customers. This focus means that, for UK small businesses, Wave Accounting has some significant deficiencies.

Most notably, Wave Accounting does not support the new Making Tax Digital (MTD) protocol for VAT, and so it will be of only limited use to businesses that need to register for VAT and file VAT tax returns digitally. Unlike some of the other providers discussed here, it also does not support the automatic importation of bank transactions via open banking, making keeping track of your financial activity a more time consuming process.

What support does Wave Accounting offer?

Wave offers expert help via its community forum, and you can also ask for technical support via a help function built into the platform. There is no phone support available, however.

Wave Accounting Verdict

Wave Accounting boasts a great range of features, has a stylish look, and there are virtually no usage limits. However, the US/Canadian focus means it won’t suit the needs of all UK small businesses.


GnuCash homepage (best free accounting software)

  • Completely free
  • Open-source desktop accounting software
  • Basic features
  • Only works on Windows, Mac, and Linux PCs

What is GnuCash?

GnuCash began life in 2001, and is a desktop open-source accounting software. If you’re confused by any of that; desktop means you need to actually download and install it, while open-source means that anyone can download and edit the actual code that makes up the program, in order to add extra functionality and fix errors.

This means it’s completely free forever, but it won’t win any awards for its UI, and it’s not particularly tailored to the needs of small businesses (there’s no open banking integration or mobile app, for example). There’s also a bit of a learning curve, and doing your accounts is a more manual and fiddly process than with some of the other software discussed in this piece.

What can GnuCash do?

GnuCash offers a basic range of accounting features. This includes:

  • A checkbook-style interface that allows you to record transactions via double entry accounting
  • Support for recurring transactions
  • Generated reports that show balance sheets, profit and loss etc.
  • Customer and vendor tracking tools
  • Multiple currency support
  • Compatible with QIF files used by some other accounting software

Why is GnuCash free?

Essentially, GnuCash is made on an entirely voluntary basis, so no one who makes it gets paid at all. The product is then provided free of charge to anyone who wants to use it, and keeps being updated by a dedicated army of volunteer developers. In other words, GnuCash is free because it’s not trying to make money at all – it just wants to help people who can’t afford professional accounting software. If you want to help them out, then you can donate via the GnuCash website, or even volunteer to test new updates.

What support does GnuCash offer?

GnuCash supports its users through its forums (called Mailing Lists), and an extensive manual and FAQ. There’s also a part of the GnuCash wiki called Using GnuCash, which gives solutions to common issues encountered by real-world GnuCash users. This probably goes without saying, but there’s no phone or email support for GnuCash.

GnuCash Verdict

Comparing GnuCash to some of the other providers on this list feels like weighing up the relative benefits of apples and oranges. They have different objectives, business models, and hugely different functionality. However, if you don’t mind the dated visuals and sometimes fiddly interface, then GnuCash is a great option for no-frills accounting software. It’s also not reliant on an internet connection, so ideal if you often work in remote areas with patchy internet coverage.

VT Cashbook

VT Cashbook (best free accounting software)

  • Basic desktop accounting software
  • Easy to use
  • Paid upgrade required for MTD VAT returns
  • Only works on Windows PCs

What is VT Cashbook?

VT Cashbook was released in 2019, but it’s from a company with a strong track record in accounting software. VT Software was founded in 1997, and its professional products (VT Accounts and VT Transaction+) are beloved by accountants, especially small firms that work with small businesses. Cashbook is the starter product – straightforward, easy-to-use desktop accounting software that’s perfect for anyone looking for a simple way to keep track of their accounts.

What can VT Cashbook do?

VT Cashbook offers the following:

  • Fast data entry with autocomplete
  • Keep track of multiple bank/cash accounts
  • Bank reconciliations (check your accounts against your bank statements)
  • Produce VAT returns (with paid upgrade)
  • Easily correct mistakes
  • Produce profit and loss accounts, balance sheets, and ledger reports

Why is VT Cashbook free?

As with some of the other software on this list, VT Cashbook is free software with basic functionality that is designed to encourage business owners to upgrade to a more advanced paid version.

In this case, VT Software offers two paid options.

The cheaper option is VT Transaction+, which costs £75+VAT a year for a single user. This allows users to create and file Making Tax Digital VAT returns, as well as maintain customer and supplier ledgers.

The full VT Accounts suite costs £150+VAT per year, and allows users to easily create professional reports for their companies, as well as quickly calculate corporation tax. It also works as a Microsoft Excel plugin, making it attractive for any Excel users that don’t want to learn the nuances of a new program.

All VT products come with a 60-day free trial.

What support does VT Cashbook offer?

VT Software doesn’t offer any dedicated support for its free Cashbook program, with the only assistance given being a detailed user guide available on its website. For the Transaction+ and Accounts programs, support is available by both phone and email, with the requirement that the user is either a current subscriber or purchased the software in the last 12 months.

VT Cashbook Verdict

There’s a reason professional accountants love VT Software products – they’re simple, they’re easy to use, and you’re not reliant on an internet connection. VT Cashbook is a great way to get started with maintaining company accounts, especially if you don’t want or need the bells, whistles and added complexity associated with some of the cloud-based accounting software services on this list. It also has no usage limits, so you won’t have to pay anything until you need to file VAT returns.

How to choose the best free accounting software for your small business

Choosing the right free accounting software for your business is an important decision, and one you should approach carefully. Below are some key things you should consider when comparing providers.

Cloud-based vs desktop

Cloud-based accounting software is all the rage right now, and it’s easy to see why – these services let you work on your accounts from anywhere with an internet connection, on any device you have to hand. This means you can snap a pic of an expenses receipt as soon as it’s handed to you, or digest your profit and loss report during breakfast. However, it’s not the ideal solution for everyone, and anyone who runs a business in an area with limited internet connectivity may find a desktop solution is better suited to their needs.

Check with your accountant (if you have one)

This should not be the crucial factor in your decision (you’re paying them, after all), but if you do already work with an accountant, then it may be useful to get their input on what software is likely to work best for your business, and which works best with their systems.

Choose your compromise

Every piece of free accounting software discussed in this article has benefits and drawbacks. To work out which one is right for you, you need to decide which of the bad points you can live with. Do you want a basic solution that has no usage limits? A slick cloud-based service that you’ll have to pay for once your business reaches a certain size? Or are you prepared to give your bank access to your accounts in return for a powerful free accounting solution? Regardless of which you choose, chances are you will have to compromise on something – there's a reason this software is free, after all.

Take them for a spin

There’s no better way of working out which free accounting software is right for your business than trying them out for yourself. Remember, they’re free, so you can simply sign up/download, put your data in, and see how each feels when you use them day to day. Give each software you're considering a little trial period, and see which one works best in practice. Many of the top paid accounting software providers (see below) also offer free trials, so you can see exactly what the extra outlay will give you in return.

The best alternatives to free accounting software

As you’ve probably realised by now, the line between free and paid accounting software is blurry to say the least. To help you work out if free accounting software is the best fit for your business, we’re going to take a quick look at four of the most popular paid accountancy software programs on the market:

All the software discussed below is cloud-based, meaning it works in your web browser, and on your mobile or tablet.

For a more comprehensive overview of the different paid accounting packages available, check out our page on the best UK small business accounting software.

QuickBooks Online

Quickbooks online (best free accounting software)

QuickBooks Online comes from another company with a long history in accounting software – Intuit software was founded in 1983, and has grown from its US origins to satisfy users all over the world. The UK is a key market for the company, and QuickBooks Online is cloud-based accounting software that has been specifically designed for UK small businesses.

It ticks all the standard boxes – track income and expenses, produce and submit Making Tax Digital VAT returns, create and send invoices, and connect multiple bank accounts – but also has great features like a cash flow planner, and built in integration for Construction Industry Scheme (CIS) deductions. All plans also come with reporting capabilities and 24/7 customer support.

Quickbooks Online has three small business plans:

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Simple Start



£12 per month (excl. VAT)

£22 per month (excl. VAT)

£32 per month (excl. VAT)

  • SmartScan VAT checker
  • Mileage tracking
  • Estimate creation
  • Up to three users
  • Manage bills and payments
  • Multi-currency support
  • Up to five users
  • Track employee time/project profitability
  • Specialised budget/stock management tools

Simple Start costs £12+VAT per month and offers all the features discussed above, as well as mileage tracking, a SmartScan VAT checker that looks for errors on your VAT return, a tool for creating and sending estimates, and a mobile app that allows you to snap receipts on the go and have the important info automatically uploaded into your accounts.

Upgrade to an Essentials plan for £22+VAT per month, and you’ll be able to have up to three users, get access to a useful tool for managing bills and payments, and be able to handle multiple currencies.

Plus, the top plan, costs £32+VAT a month and adds support for up to five users, tools for tracking employee time and project profitability, as well as specialised budgeting and stock management tools. The last of these comes with low stock alerts, leaving you with one less thing to worry about.

Payroll can be added to any of these plans, with the cost depending on whether you need standard or advanced payroll, and how many employees are being paid. This service starts at £4+VAT per month, plus £1 per paid employee per month.

At the time of writing, QuickBooks Online is offering 75% off these plans for the first six months. All plans have a 60-day free trial, so you can try it for yourself with no obligation.


Freshbooks (best free accounting software)

FreshBooks started way back in 2004, and has been cloud-based since the beginning. From its Toronto home, it has gradually spread worldwide, and has a tailored offering for the UK. All FreshBooks plans include unlimited customised invoices, unlimited expense entries, a tool that helps you create and send Making Tax Digital VAT returns, the ability to accept credit card payments online, open banking integration, unlimited time tracking, unlimited estimates, and specialised tax time reports.

There are two FreshBooks plans designed for small businesses, as well as a Lite plan for sole traders:

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£11 per month (excl. VAT)

£19 per month (excl. VAT)

£30 per month (excl. VAT)

  • Send unlimited invoices to up to 5 clients
  • MTD VAT return filing
  • Unlimited expenses
  • Send unlimited invoices to up to 50 clients
  • Invite your accountant
  • Bank reconciliation
  • Send unlimited invoices to up to 500 clients
  • Track project profitability
  • Accounts payable

The Plus plan costs £19+VAT per month and offers all the features discussed above, plus automated recurring invoices, scheduled late fees, automated late payment reminders, and the ability to create client retainers.

There’s also a handy feature called ‘Proposals', which helps creative professionals to produce company documents that explain their services or clearly explain their creative plans and associated fees.

This plan is limited to 50 billable clients, but FreshBooks makes clear that this limit applies to active and archived clients, and that old clients can be deleted to make space. You will also still see the info for deleted clients, and deleted clients can be undeleted later.

If you have more than 50 clients, then you’ll need the Premium plan. This costs £30+VAT per month, and supports up to 500 billable clients.

If you have more than 500 billable clients, then you’ll need to contact FreshBooks directly for a custom solution, with a personal account manager and customised training.

On both the plans discussed in detail above, extra users can be added for £7+VAT per person per month, while advanced payments (so you can process cards in person or over the phone) can be added for £15+VAT per month.

At the time of writing, FreshBooks is offering 60% off these plans for the first six months, and all plans have a 30-day free trial so you can try FreshBooks for yourself.


Xero (Best free accounting software)

Xero began in 2006 in Wellington, New Zealand, and has now expanded all over the world, including three UK offices (in London, Manchester, and Milton Keynes). As this presence indicates, the UK is a key market for Xero, and its cloud-based accounting services are used by over half a million UK businesses.

The features offered by Xero are comprehensive, including open banking integration, tools to create and send invoices, inventory management, a customisable dashboard that shows you at a glance how your business is doing, Making Tax Digital VAT returns submission, automatic Construction Industry Scheme (CIS) calculations/reports, and a mobile app that lets you tackle your accounts on the go.

24/7 online support is also included, with Xero noting that whenever you’re working, their global presence means someone will always be available to help.

While it costs extra (see below), Xero also has a sophisticated payroll service that can easily handle all sorts of absences.

Xero offers three plans for UK small businesses:

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£12 per month (plus VAT)

£26 per month (plus VAT)

£33 per month (plus VAT)

  • Making Tax Digital VAT returns
  • Open banking integration
  • Strict usage limits
  • Short-term cash flow and business snapshot
  • Bulk reconcile transactions
  • No usage limits
  • Everything included in Standard plus
  • Multi-currency support

The Starter plan costs £12+VAT per month, and comes with all the features discussed above. There are, however, some pretty strict usage limits – businesses on the Starter plan are only able to send 20 invoices/quotes per month, and enter 5 bills per month.

The Standard plan costs £26+VAT per month, and removes all of these limits. This makes it a great fit for growing businesses.

Finally, the Premium plan costs £33+VAT per month, and adds support for multiple currencies.

As well as payroll, a number of optional extra services can be added to any of the plans above. These are discussed below:

  • Xero payroll – £5+VAT per month (up to 5 employees), £1+VAT per month for each additional employee
  • Xero expenses – £2.50+VAT per month, plus £2.50+VAT per month for each additional active user
  • Xero projects – £5+VAT per month, plus £5+VAT per month for each additional active user
  • Xero Construction Industry Scheme (CIS) contractor – £5+VAT per month (allows users to submit CIS returns from Xero)

All Xero plans come with a 30-day free trial.

Sage Business Cloud Accounting

Sage Business Cloud Accounting (best free accounting software)

Sage is a UK company that has been producing accounting software for the best part of four decades. Founded in 1981, its latest offering – Sage Business Cloud Accounting – is a cloud-based accounting solution that’s perfect for businesses large, small, and anywhere in between.

Alongside everything you’d expect from cloud-based accounting software in 2022 – including open banking integration, invoice creation, and Making Tax Digital VAT returns – Sage Business Cloud Accounting includes award-winning customer service. This is available 24/7 via phone and live chat, and vital for all those small business owners whose working hours frequently stretch beyond the standard 9 to 5 (and that’s most of you, in our experience).

The price depends on which Sage Business Cloud Accounting package you select:

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Accounting Start

Accounting Standard

Accounting Plus

£12 per month (plus VAT)

£24 per month (plus VAT)

£30 per month (plus VAT)

  • Create and send sales invoices
  • Submit VAT returns
  • 24/7 support
  • Advanced reporting capabilities
  • Unlimited users
  • Cash flow statements
  • Support for multiple currencies
  • Inventory management

The cheapest package, Accounting Start, costs £12+VAT per month and is designed for sole traders. It offers entry-level accounting software that lets you (amongst other things) create sales invoices, track what you’re owed, connect your bank account, and submit VAT returns. You’ll also get the mobile app for working on the go, plus 24/7 support.

Accounting Standard is aimed at small businesses, and costs £24+VAT per month. For this extra outlay, you get advanced reporting capabilities, support for unlimited users, cash flow statements, and the ability to record purchase invoices.

Billed as advanced accounting software for small businesses, Accounting Plus is the top package. For £30+VAT a month, you get everything in the two packages discussed above, plus support for multiple currencies and inventory management (which can make a real difference to anyone running a retail business).

Payroll services can be added to any of these packages for an extra fee (from £7+VAT per month, depending on the number of employees).

At the time of writing, Sage is offering 3 months free on all its Business Cloud Accounting packages, as well as a 30-day free trial so you can see if it’s right for your business.

Final thoughts

Choosing the right accounting software for your business is an important decision, and one you should consider carefully. Finding a solution that fits you and your business could save you countless hours of stressful and time-consuming admin, freeing you up to do what you do best – run your business.

Free accounting software is hugely attractive to UK small businesses, especially those that are just starting out. However, as this piece has explained, all free accounting software comes with compromises, so you have to think about which of these you can live with.

Moreover, you don’t want your small business to stay small forever, and chances are you’ll have to move to paid accounting software at some point. If you can afford it, finding a paid solution that will grow with your business like QuickBooks or FreshBooks could make this whole process much easier.

Finally, all the options discussed on this page are either free or offer a 30-day free trial, so be sure to make use of these options. It’s only by actually using the software that you’ll be able to work out which is right for you, which compromises are tolerable, and which extra features are really worth paying for.

Good luck!

Frequently Asked Questions
  • Is Wave Accounting really free?
    Yes, Wave Accounting is really free. However, its US/Canada focus means it's not particularly suitable for useful for UK businesses, and it doesn't support MTD VAT filing.
  • Can you get Xero for free?
    Xero doesn't have a free plan. However, it does offer a 30-day free trial, so you can sign up risk-free to see exactly what it has to offer.
  • Is QuickBooks free to use?
    QuickBooks doesn't have a free package, but it does offer a 60-day free trial so you can see if it's the right fit for your business. is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps to provide free advice and reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

Alec is Startups’ resident expert on politics and finance. He’s provided live updates on the budget, written guides on investing and property development, and demystified topics like corporation tax, accounting software, and invoice discounting. Before joining, he worked in the media for over a decade, conducting media analysis at Kantar Media and YouGov, and writing a wide variety of freelance pieces.

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