Xero vs FreeAgent for Sole Traders UK 2026
Xero vs FreeAgent is the accounting decision most self-employed tradespeople face now that Making Tax Digital for Income Tax is here. Both are HMRC-recognised, both do VAT returns, CIS and bank feeds, and both cost about the same at full price. For a sole trader, though, the right answer often comes down to two things the comparison sites skip: which bank you use, and which job management app you run your jobs in. This Xero vs FreeAgent comparison for UK sole traders uses October 2026 prices from both pricing pages.
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Choose FreeAgent if you bank with NatWest, RBS, Ulster Bank or Mettle (it is free for as long as you keep the account), or if you want unlimited invoices and Self Assessment filing built in for £19 a month. Choose Xero if you run your jobs in an app such as Tradify, ServiceM8, Fergus, Powered Now or Jobber, because those sync with Xero but not FreeAgent, or if your accountant works in Xero.
Quick Verdict
Best for most sole traders
FreeAgent
Free with NatWest, RBS, Ulster Bank or Mettle. Otherwise £19 a month with unlimited invoices, MTD, Self Assessment filing and a live tax timeline.
Best if you use job management software
Xero
Connects with nearly every trade job app and most accountants. Ignite is £18 a month but capped at 20 invoices; unlimited starts at £39.
Xero vs FreeAgent Pricing UK
Prices from each company’s UK pricing page in October 2026, all excluding VAT. Both were also running introductory discounts when we checked: 90% off Xero for six months, and 50% off FreeAgent for six months.
| Plan | Standard price | What you get |
|---|---|---|
| FreeAgent (sole trader) | £19/month or £190/year | Unlimited invoices and estimates, bank feeds, expenses, MTD for Income Tax, VAT returns, Self Assessment filing, CIS, tax timeline, mobile app |
| FreeAgent with NatWest, RBS, Ulster Bank or Mettle | £0 | The full sole trader plan, free while you keep the business account (Mettle needs at least one transaction a month) |
| Xero Ignite | £18/month | Quotes and 20 invoices, 10 bills, bank reconciliation, MTD for Income Tax, VAT returns, subcontractor CIS calculations |
| Xero Grow | £39/month | Unlimited invoices and bills, auto-reconcile, expense claims for one user, payroll for one person |
| Xero Comprehensive | £55/month | Adds multiple currencies, projects and expenses for 10 users |
| Xero contractor CIS returns | Optional add-on | Submit monthly contractor CIS returns from Xero |
What You Would Actually Pay
| Your situation | FreeAgent | Xero |
|---|---|---|
| Sole trader with a NatWest, RBS, Ulster or Mettle account | £0 | £18 (Ignite) |
| Sole trader, other bank, under 20 invoices a month | £19 | £18 (Ignite) |
| Sole trader sending more than 20 invoices a month | £19 | £39 (Grow) |
| Paying yearly | £190 a year (about £15.83 a month) | From £18 a month |
The pattern: FreeAgent is either free or slightly dearer than Xero Ignite, and much cheaper than Xero once you send more than 20 invoices a month. Many busy tradespeople do, which pushes them onto Xero Grow at £39. The exception is if your invoices come from a job management app instead, which changes the picture completely.
The Trade Angle: Which Works With Your Job App?
Most tradespeople who use software to quote and invoice do it in a job management app, then sync to accounting software for tax. Here is what each of the apps we have compared lists as its accounting integrations:
| Job management app | Syncs with Xero | Syncs with FreeAgent |
|---|---|---|
| Tradify | ✓ Yes | ✗ Not listed |
| ServiceM8 | ✓ Yes | ✗ Not listed |
| Fergus | ✓ Yes | ✗ Not listed |
| Powered Now | ✓ Yes, from Professional | ✗ Not listed |
| Jobber | ✓ Yes | ✗ Not listed |
| Commusoft | ✓ Yes | ✓ Yes |
If you already use one of these, or plan to, Xero is the safer choice, because your invoices and payments flow straight into it. One useful detail: when invoices are raised in your job app and synced across, the 20-invoice cap on Xero Ignite is worth checking with Xero before you rely on it, since synced invoices may count towards it.
Features Face-Off
| Feature | FreeAgent | Xero |
|---|---|---|
| MTD for Income Tax | ✓ Quarterly updates and final declaration | ✓ MTD for Income Tax ready |
| Self Assessment filing | ✓ File directly to HMRC | ⚠ Not listed on its pricing page, check how you will file |
| VAT returns | ✓ Yes | ✓ Yes, all plans |
| CIS as a subcontractor | ✓ Deductions tracked | ✓ Calculations and reports, all plans |
| CIS as a contractor | ⚠ Monthly return generated, you file on HMRC’s site | ⚠ Filing is a paid add-on |
| Invoice limit | ✓ Unlimited | ⚠ 20 a month on Ignite, unlimited from Grow |
| Live tax estimate | ✓ Tax timeline | ⚠ Reports and cash flow forecast |
| Job app integrations | ⚠ Limited (Commusoft among those we checked) | ✓ Tradify, ServiceM8, Fergus, Powered Now, Jobber and more |
| Payroll | ✓ Included (not on cash basis accounts) | ⚠ £1.50 per person on Ignite, 1 person on Grow |
| Free trial | 30 days | One month free, or an introductory discount |
Where Each Wins
FreeAgent wins on
- Free with NatWest, RBS, Ulster Bank or Mettle
- Unlimited invoices on its only sole trader plan
- Self Assessment filing straight to HMRC
- A live tax timeline showing what you owe and when
- Built for sole traders, simple to run yourself
Xero wins on
- Syncs with almost every trade job management app
- Used by more accountants and bookkeepers
- Slightly cheaper Ignite plan for low invoice volumes
- Contractor CIS filing available as an add-on
- Scales to limited company, payroll and teams
FreeAgent vs Xero: Which Should You Choose?
Tradify handles quotes, jobs, certificates and invoices, and syncs everything to Xero, Sage or QuickBooks on every plan. 14-day free trial, no card needed.
The Bottom Line
For a sole trader who does their own books, FreeAgent is the better value. It is free if you bank with NatWest, RBS, Ulster Bank or Mettle, has no invoice cap, and files your Self Assessment for you. That covers a large share of self-employed tradespeople.
Xero is the better choice the moment a job management app is part of your setup, because nearly every trade app syncs with Xero and very few with FreeAgent. It is also what most accountants use. Both are Making Tax Digital ready, so whichever you pick, you are covered for the new quarterly updates.
Frequently Asked Questions
For a sole trader who does their own books, FreeAgent is usually better value: it is free with a NatWest, RBS, Ulster Bank or Mettle account, otherwise £19 a month with unlimited invoices and Self Assessment filing. Xero is better if you use a job management app such as Tradify or ServiceM8, since those sync with Xero, or if your accountant uses Xero.
Yes. FreeAgent is free for as long as you keep a business current account with NatWest, Royal Bank of Scotland or Ulster Bank. It is also free with a Mettle account if you make at least one transaction a month. Optional add-ons may be charged.
Xero Ignite costs £18 a month plus VAT, but it is limited to 20 invoices and 10 bills a month. Xero Grow, with unlimited invoices, costs £39 a month. Xero was offering 90% off for the first six months when we checked.
Yes. Both are HMRC-recognised for Making Tax Digital. FreeAgent says you can send quarterly updates and file your final declaration directly to HMRC, and Xero lists MTD for Income Tax as ready on every plan.
Yes. FreeAgent supports CIS for sole traders and limited companies. As a subcontractor, it tracks deductions taken from your invoices. As a contractor, it generates your monthly CIS300 return, which you then submit through HMRC’s online service. Xero calculates subcontractor CIS on every plan and offers contractor CIS return filing as an add-on.
Tradify lists Xero, Sage and QuickBooks Online as its accounting integrations, not FreeAgent. The same is true of ServiceM8, Fergus, Powered Now and Jobber, which is why tradespeople who use a job management app usually pick Xero.
Yes. Both let you export your data, and accountants regularly move clients between them. It is easiest to switch at the start of a tax year or quarter.
TradeStack HQ helps UK tradespeople find the best tools to run smarter businesses. Some links on this page are affiliate links, we may earn a commission if you sign up, at no extra cost to you. We have no affiliate deal with Xero or FreeAgent. Pricing checked against Xero and FreeAgent’s own UK pricing pages in October 2026. See how we test and check.