20 Best Accounting Software UK for Self-Employed and Small Business

FreshBooks is a popular accounting software for small businesses and freelancers. The platform makes it into our list because of its intuitive user interface and quick setup.

Recognised by HMRC, FreshBooks is most significantly known for its robust invoice management. It offers a free invoice generator that lets you build invoices in less than five minutes. Most distinctively, I love it for its automated invoice reminders and auto-send invoices for recurring payments.

I would also pick FreshBooks for its automated expense and bill tracking, along with its intuitive double accounting feature. Once you connect your bank account, you can track all the ins and outs of your accounting system.

Additionally, you can store the picture of the receipt by scanning through the mobile app and adding this entry to your accounts. FreshBooks offers access to various financial accounting reports such as balance sheets, ledger accounts, general ledger, cash flow, and more.

FreshBooks Pricing

FreshBooks offers four pricing options, as given below:

– Lite: £7.50/month

– Plus: £12.50/month

– Premium: £17.50/month

– Select plan is available on request.

Sage is a cloud accounting solution that helps small and self-employed UK traders monitor cash flow, create customisable invoices, and automate data entry. The platform makes it into our list because of its MTD functionality for sole traders and self-employed individuals.

For instance, the software uses the SA103 self-assessment form for calculating income & expenses and successfully fills the self-assessment tax returns. I’d also pick Sage for its powerful automation capabilities for importing bank transactions and matching them with the right transaction category.

Sage is a suitable choice if you’re looking to streamline your tax and VAT returns. So, you can choose a default VAT rate, and the software will automatically select the right rate for the transaction. Sage records all the VAT actions and transactions digitally, which works much like a digital paper trail.

For international businesses, Sage allows you to convert from one currency to another in real-time to track loss and profits.

Sage Pricing

Sage offers three pricing options:

– Accounting Start: £15/month [For VAT-registered sole traders or cash accounting small businesses]

– Accounting Standard: £30/month [For small businesses working with suppliers, CIS, or with accrual accounting]

– Accounting Plus: £39/month [For small businesses managing inventory or working in multiple currencies]

Similar to FreshBooks, QuickBooks caters to the needs of small and medium-sized businesses with its extensive set of features—accounting, invoicing, payroll, and expense tracking. The navigation is fairly easy, with all the features laid out logically on the right side of the dashboard.

To make it even easier, QuickBooks offers various data visualisation tools that provide a graphical representation of metrics such as —sales over time, income, expenses, and profit-and-loss data.

For example, I could use the template to automate the sales tax payment reminder on time. Or, use a template to receive accounting reports over a frequent period.

QuickBooks also provides a self-assessment tax return for the sole traders who are not liable for the VAT returns. Even if you submit the VAT returns, QuickBooks will directly submit them to HMRC from the spreadsheets.

I’d also recommend QuickBooks for its streamlined accounting solution that lets you review all the accounts in one place, manage micro-entities and prepare companies for FRS 105 annual accounts to submit to HMRC.

QuickBooks Pricing

QuickBooks offers five different pricing options:

– Sole trader: £1/month [For sole traders and single property owner landlords]

– Simple start: £8/month [For Sole Traders or small businesses]

– Essentials: £16.50/month [For small businesses working with suppliers]

– Plus: £23.50/month [For businesses managing projects, stock, VAT]

–Advanced: £46/month [For businesses needing automatic data backup]

Xero makes it into our list because of its extremely affordable plans. The plan starts at as low as £1.60 per month with features related to invoicing, cash flow, and bank reconciliation. It gives you access to every major financial element that you need in double-entry accounting for small businesses: bills and expenses, inventory, payroll, purchases, and sales.

I like that every plan gives unlimited user access so teams can work efficiently across different tasks simultaneously. For example, one user might be able to create unlimited invoices while another handles the estimates and accounting tasks. Another team can view reports and edit the transactions.

I’d suggest Xero because of its greater focus on VAT returns. The platform offers a centralised repository for managing VAT returns and filing and submitting them to HMRC.

Xero offers customisable dashboards to adjust according to performance metrics such as account balances, bills to pay, invoices owed, and favourite reports. If you’re a small business seeking an intuitive user interface with affordable plans, Xero is a suitable pick.

Xero Pricing

Xero offers four pricing options:

– Ignite: £1.60/month

– Grow: £3.30/month

– Comprehensive: £4.70/month

– Ultimate: £5.90/month

UK-based FreeAgent is a great online accounting solution built for consultants and self-employed professionals. Though the interface is a bit outdated, you’ll get a lot of accounting features under one platform.

Its centralised dashboard gives access to flexible cash flow and live bank balance charts and provides real-time profit-loss reports. FreeAgent makes it into our list because of its customisable invoice solution and ability to accept payments through various means. Users can choose from a range of templates for creating professional invoices.

Being a UK-based organisation, they focus largely on creating HMRC-compliant invoices. Additionally, businesses can accept payments in one click using Tyl, Stripe, GoCardless and PayPal. FreeAgent allows accounting teams to track billable hours and convert them into flexible reports and invoices.

FreeAgent Pricing

FreeAgent offers a 30-day free trial with access to various premium features. It provides pricing plans suited to different business types:

– Sole trader plan costs £9.50/month or £95/year.

– LLP plan costs £13.50/month or £135/year.

– Limited company plan costs £16.50/month or £165/year.

QuickFile is a UK-based accounting solution that follows compliance with MTD and submits the returns directly to HMRC. One of the major USPs of QuickFile is its affordable pricing options.

The three initial pricing options, extra small (XS), small (S), and medium plans, are free, whereas the large (L) and extra large editions come with a pricing tag.

Though there aren’t many accounting features, QuickFile is known for its customisable invoices and ability to build branded portals. Using this portal, clients can view, download, print and pay their invoices through portals such as PayPal, Stripe, GoCardless, Square, SumUp and more.

Additionally, you get a rich set of reports and custom tools to analyse your financial trends and business health. Overall, QuickFile is a top choice for small and medium-sized businesses that need flexibility connecting with various UK banking institutions.

QuickFile Pricing

QuickFile offers two paid pricing options, with plans named L and XL. Both the plans cost £60/year plus the VAT. However, the L plan covers 1001 – 4000 ledger entries, whereas the XL plan covers more than 4,000 entries.

Zoho Books is a free-to-use accounting software that offers various UK accounting services, including MTD VAT return filing, mileage tracking and automated payment reminders. The software lets you set up a default tax VAT rate and gives you the flexibility to define multiple tax rates at once.

Once a new sales transaction occurs, Zoho Books records it in its MOSS reports with details such as country and taxes to pay.

I also like that Zoho gives the flexibility to allow agents to file VAT returns on behalf of your organisation. Zoho offers direct integration with HMRC, which is a great time-saver.

One of its highlight features is that it turns your inbox into a workspace. For instance, when you receive an email, it can be directly converted into transactions.

ZohoBooks Pricing

ZohoBooks offers five pricing options, which are as follows:

– Standard plan costs €10/org/month

– Professional plan costs €20/org/month

– Premium plan costs €25/org/month

– Elite plan costs €85/org/month

– Ultimate plan costs €165/org/month

Crunch is free online accounting software for sole traders and small businesses. This simple accounting software is touted best for its customisable invoices and expert self-assessment tax filing.

I’d recommend Crunch for its on-demand accountants offering personalised tax returns and corporate filing assistance. Also, if you’re willing to generate year-end accounts to analyse financial health, the platform will guide you from start to end.

Additionally, Crunch provides self-assessment tax return assistance with tax-saving guidance from experts.

Crunch Pricing

Crunch offers a 14-day free trial. After the free trial, you can choose between the sole trader plan or limited company offerings.

– Crunch Sole Trader Pro plan costs ‍£21.20 + VAT per month.

– Crunch Pro plan costs £69.20 + VAT per month.

– Crunch Premium plan costs £106 + VAT per month.

– Crunch Enterprise plan costs £134 + VAT per month.

Coconut by Simple Tax is an easy-to-use accounting software that provides a range of accounting features—monitoring cash flow, receipt capture, expense management and powerful invoicing.

I’d like Coconut for its intuitive interface, which makes it a suitable choice for accountants. The main dashboard allows you to add clients and connect their banks. As you click on the client’s name, Coconut will allow you to view your transactions, invoices and digital receipts—in different tabs.

For submitting the self-assessment tax returns, Coconut uses the Simpletax service to connect with the HMRC. You’ll also love its mobile app that allows you to send customisable invoices and track accounts.

Coconut Pricing

Coconut offers a single monthly plan, priced at £9.95 per month.

Pandle is a bookkeeping software that uses machine algorithms to reconcile bank transactions and automate entries. The onboarding process requires setting up bank accounts and selecting additional options such as VAT numbers and other details.

It uses the bookkeeping data to automatically calculate the VAT returns in real-time and determine the total VAT tax returns. I also like its ability to set up customisable invoices with a ‘Pay Now’ button for faster payments. You can set up automated payment reminders, payment terms, and emails to customers.

Pandle is touted for its comprehensive VAT management capabilities, which allow you to file VAT returns through MTD. You only need to authorise MTD with HMRC, and Pandle will do all the heavy lifting.

Pandle Pricing

Pandle offers a free forever plan. Pandle Pro starts with a 14-day free trial, after which you can subscribe at £5 per month plus VAT.