If you've narrowed your shortlist to QuickBooks and Xero, here's the direct comparison. For the fuller field of options — including FreeAgent and Coconut — see our roundup of AI tools for UK sole traders' Self Assessment. This post focuses specifically on how these two compare head-to-head.
Quick verdict
| QuickBooks Sole Trader | Xero (entry tier) | |
|---|---|---|
| Price | £10/month | ~£7–15/month (sources disagree — verify current rate) |
| MTD for Income Tax | Yes | Yes |
| Self Assessment filing included | Yes | No |
| Built-in mileage tracking | Yes | Not standard |
| VAT support on entry tier | No (needs Simple Start or above) | Yes |
| CIS (Construction Industry Scheme) support | Yes | No |
| Unlimited users | No | Yes, on all plans |
Both are HMRC-recognised for MTD for Income Tax. Pricing changes often, and QuickBooks raised UK prices in January 2026 — confirm current rates directly before subscribing.
Where QuickBooks wins
Self Assessment filing is built into the Sole Trader plan. This is the clearest differentiator: QuickBooks' entry tier includes actual Self Assessment filing, while Xero's comparable entry tier doesn't — you'd need separate software or an accountant to file from Xero.
Mileage tracking comes standard, useful if driving is part of your work and you don't want a separate app for it.
CIS support matters if you're a sole trader in construction — QuickBooks handles this on its entry tier; Xero's doesn't, based on the sources I checked.
Lower confirmed price. £10/month for QuickBooks Sole Trader is consistently reported across many sources. Xero's equivalent tier price was much less consistent (see below).
Where Xero wins
VAT support on the entry tier. If you're VAT-registered or approaching the £90,000 threshold, QuickBooks' Sole Trader plan doesn't cover VAT — you'd need to step up to Simple Start or above. Xero's entry-level plans generally include VAT handling.
Unlimited users on every plan. If you ever want an accountant or bookkeeper with direct access, Xero doesn't charge extra for that; some reviewers note QuickBooks can restrict or charge for additional seats depending on tier.
Reportedly stronger documentation and support. One comparison that tested both platforms' help centres found Xero's notably better — a real factor if you're doing this without an accountant's guidance.
A pricing discrepancy worth flagging
Sources genuinely disagreed on Xero's relevant entry-level price for sole traders — figures ranged from about £7/month to £15/month, with different sources using different plan names ("Simple" vs "Ignite") inconsistently. This might reflect Xero having introduced a newer, cheaper MTD-specific tier that not all sources have caught up on, or simply inconsistent reporting. Check Xero's current UK pricing page directly before comparing costs — don't rely on a single figure here, including this one.
Which one fits your situation?
- Simple, non-VAT sole trader who wants Self Assessment filing built in: QuickBooks Sole Trader is the more complete package at a confirmed low price.
- VAT-registered, or expect to cross the £90,000 threshold soon: Xero's entry tier covers VAT where QuickBooks' doesn't at the same level.
- Work in construction and need CIS support: QuickBooks.
- Want an accountant or bookkeeper to have free access without extra seat costs: Xero.
- Not sure yet, want the cheapest route to bare MTD compliance: check whether you qualify for free FreeAgent via NatWest, RBS, or Mettle first — covered in our full roundup — before paying for either of these.
FAQ
Which is cheaper for a UK sole trader, QuickBooks or Xero?
QuickBooks Sole Trader is confirmed at £10/month across multiple sources. Xero's comparable entry tier was reported inconsistently (£7–15/month) — confirm directly on Xero's site before assuming it's cheaper or more expensive.
Does Xero file my Self Assessment return?
Based on the sources I checked, no — Xero's entry-level plans handle MTD record-keeping and quarterly updates, but Self Assessment filing itself isn't included the way it is with QuickBooks' Sole Trader plan. Confirm this directly, since it's an important gap if you were assuming otherwise.
Can I start on the cheaper plan and upgrade later if I register for VAT?
Generally yes for both platforms — but check the specific upgrade path and whether historical data carries over cleanly, since migration quality between tiers varies by provider.
Are both QuickBooks and Xero actually MTD for Income Tax compliant?
Yes — both are HMRC-recognised for MTD for Income Tax Self Assessment, consistently confirmed across sources.
Last updated: September 2026. This post is for informational purposes only and isn't tax or financial advice. Consult a licensed UK accountant for guidance specific to your situation.
Comments
Post a Comment