Best accounting software for sole traders
Looking for accounting software as a sole trader? Here's a plain-English comparison of the main options - free and paid - so you can find one that fits your budget and how you work.
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9/23/20263 min read
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Best accounting software for sole traders
The right accounting software makes it significantly easier to track your income and expenses, prepare your Self Assessment return, and - from April 2026 onwards - meet your Making Tax Digital obligations. The wrong one is something you end up paying for but not using.
Here's a plain-English rundown of the main options for sole traders, from free tools to full accounting packages.
Do you actually need accounting software?
Not necessarily. If your finances are straightforward and you're comfortable with spreadsheets, a well-designed income and expenses tracker can handle everything you need for Self Assessment. For Making Tax Digital, you'd add bridging software on top to handle the quarterly submissions.
We cover that approach in our Spreadsheet and Planning Tools directory, which includes our own Sole Trader Tax Tracker from Rootstock Planning.
If you want something more automated - bank feeds pulling in transactions, automatic expense categorisation, invoicing in the same place as your accounts - then dedicated software starts to earn its keep.
Free options
Sage Sole Trader has a free plan for non-VAT registered sole traders that covers income and expense tracking, one bank feed connection, invoicing and a Self Assessment tax summary. It's HMRC recognised and MTD ready. The paid plan at £7/month adds receipt capture, multiple bank feeds and webchat support. A strong starting point if you want proper accounting software at no cost.
Read our full Sage Sole Trader review for a detailed look at both plans.
Zoho Books has a free tier capped at 1,000 invoices and 1,000 expenses per year, which includes invoicing, expense tracking, bank reconciliation and MTD compatibility. It's a generous free tier and paid plans start from around £10/month if you outgrow it.
QuickFile is a UK-built free tool for businesses with under 1,000 ledger entries per year. It's less well known than the bigger names but capable, and it's MTD compatible.
FreeAgent is free if you bank with NatWest, Mettle, RBS or Ulster Bank - otherwise it's around £19/month. It's built specifically for freelancers and sole traders, handles Self Assessment filing directly, and is one of the most comprehensive free options available if you qualify. It's currently without a public affiliate programme, but we list it in our directory as a plain link.
Mid-range paid options
QuickBooks is one of the most popular choices for sole traders who want a proper accounting package. It has a clean, intuitive interface, a strong mobile app, MTD compatibility, and guides you through your Self Assessment as well as quarterly submissions. Plans start from around £10/month with a 30-day free trial.
FreshBooks is focused on invoicing and time tracking alongside accounting, making it a good fit for service-based sole traders who bill by the hour or by project. Plans start from around £11/month, though it's not on HMRC's MTD recognised list so you'd need separate software for quarterly submissions.
Full accounting packages
Xero is a well-established cloud accounting platform used by a large number of UK accountants. It has strong bank feed integration, MTD compatibility, and a broad range of integrations with other tools. The Ignite plan (designed for sole traders and very small businesses) costs £18/month. Xero is worth considering if you're working with an accountant who already uses it, or if you plan to grow beyond a sole trader structure.
Sage also offers Sage Accounting Start for VAT-registered sole traders at around £20/month, which is a step up from Sage Sole Trader in terms of features. The Sage brand has strong name recognition and a long track record in UK accounting.
A note on MTD
All of the paid options above are MTD compatible except FreshBooks. If Making Tax Digital applies to you now - or will apply soon - it's worth checking MTD compatibility before committing to any software. Our post on the best MTD software for sole traders goes into more detail on which tools handle quarterly submissions best.
How to choose
If you want something free: Zoho Books free tier or Sage Sole Trader's free plan are both worth starting with.
If you bank with NatWest, Mettle, RBS or Ulster Bank: get FreeAgent - it's free and it's excellent.
If you want a widely used, well-supported paid option: QuickBooks is a solid choice for most sole traders.
If you work with an accountant: ask which software they prefer before you commit - using the same system saves everyone time.
You can compare all of these tools side by side in our Accounting and Bookkeeping directory.
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