Software Comparison · Updated May 2026
A genuinely neutral comparison from accountants who use all three daily. No affiliate links, no preferred vendor relationship. Just what each tool is actually good at, where it falls short, and which businesses each one suits.
If you Google "best accounting software UK", every result is an affiliate-driven listicle. We have no affiliate relationship with any of these vendors. Fernside Accounting uses all three across our client base — about 45% Xero, 35% FreeAgent, 20% QuickBooks — so the comparison below reflects daily use, not a vendor pitch.
All three are MTD-compliant for VAT and MTD ITSA. All three handle Self Assessment, basic payroll, bank feeds, mobile apps and invoicing. The differences are in fit, not in basic capability.
| Feature | Xero | FreeAgent | QuickBooks |
|---|---|---|---|
| Starter price (per month, UK) | £16 (Ignite) | From free with NatWest/RBS/Ulster Bank/Mettle | £12 (Simple Start) |
| Mid-tier price (most popular) | £33 (Grow) | £19 (sole trader) / £33 (limited) | £30 (Essentials) |
| Top-tier price | £47 (Comprehensive) | £33 (covers everything) | £55 (Plus / Advanced) |
| MTD VAT | Yes — native | Yes — native | Yes — native |
| MTD ITSA ready (April 2026+) | Yes | Yes | Yes |
| Landlord/rental property module | Via add-on (e.g. Hammock) | Built-in, strong | Workarounds required |
| Payroll (per employee/month) | +£6 (up to 5) / +£10 (more) | Included up to 3 (limited plan) | +£5 from Standard plan |
| Construction reverse-charge VAT | Cleanest implementation | Manual tax code setup | Manual tax code setup |
| Project tracking | Yes (Established / Comprehensive) | Built-in to all plans | Yes (Plus / Advanced) |
| Multi-currency | Yes (top tier) | No | Yes (Essentials+) |
| App ecosystem (3rd-party integrations) | 1,000+ apps (strongest) | Smaller, curated | Large, varied quality |
| Best for company size | Limited companies, 1-50 staff | Sole trader, contractor, micro Ltd | Mid-size, US-leaning, established |
Prices are correct at May 2026. All three vendors run frequent promotional pricing (50% off for first 6 months is standard). The list price is what you'll pay long-term, so use that for comparison.
Limited companies with multiple bank accounts, growing transaction volumes, ambitions to scale, or industry-specific needs that need third-party app integration. Construction firms (reverse-charge VAT). Anyone where you'll outgrow FreeAgent in 12-24 months — better to start here than migrate later.
Sole traders, freelancers, contractors and micro limited companies. Landlords with personally-held property. Anyone who banks with NatWest, RBS, Ulster Bank or Mettle and wants the free tier. Businesses that want UK-built software with simple all-inclusive pricing.
Picking the wrong software can mean migrating again 18 months later — expensive, time-consuming and risky. A free 20-minute call to discuss your business, future plans and what you need from accounting software, with no vendor agenda.
Book a free 20-min callEstablished mid-size businesses, particularly those with existing US-leaning tech stacks (Salesforce, HubSpot, Mailchimp). Companies where invoice appearance matters substantially. Businesses already on QuickBooks Desktop who want to move to the cloud version.
You need simple invoicing, expense tracking, MTD ITSA when it applies, and a self-assessment-ready year-end position. FreeAgent's sole-trader UX is the best of the three for this. Free if you bank with NatWest/RBS/Ulster Bank/Mettle; otherwise £19/month for the sole trader plan.
Xero handles the staff growth, the reporting needs, and the eventual third-party app integrations (Dext for receipts, Float for cashflow, etc.) better than FreeAgent. The migration from FreeAgent to Xero later is expensive and risky — better to start here. £33/month + £6/month payroll add-on.
FreeAgent's landlord module is built-in, well-designed, and works with the new MTD ITSA quarterly submission requirement from April 2026. Xero requires a paid add-on (Hammock at ~£15/month). QuickBooks needs workarounds.
The reverse-charge VAT implementation matters enormously here. Xero's is the cleanest and least error-prone. The CIS contractor side (verification, monthly returns) is also strongest in Xero, particularly with the CIS Contractor add-on for £5/month.
If you're already on Salesforce, HubSpot and other US-built tools, QuickBooks integrates more tightly than the alternatives. The caveat: the UK-specific quirks (HMRC Self Assessment dashboards, CIS, MTD-specific workflows) feel less polished than in Xero or FreeAgent.
Start with FreeAgent — it's free if you bank with NatWest/RBS/Ulster Bank/Mettle, and the sole-trader UX won't intimidate you in the early days. If/when you incorporate or grow past 5 employees, migrate to Xero. The migration is well-documented and your accountant should handle it for you.
Honest summary of how we recommend across our own client base:
The honest truth about software differences: for a typical small UK business, the choice between Xero, FreeAgent and QuickBooks is much less important than choosing any of them and using it properly. All three are MTD-compliant, all three handle the basics well, all three integrate with bank feeds. The actual productivity difference between them, for a typical small business, is small. Pick the one that fits your needs and budget, and don't agonise over it.