Being a sole trader in 2026 means facing Making Tax Digital for Income Tax, which is moving self employed people off the annual paper return and onto quarterly digital updates. If you have run your books on a spreadsheet for years, that is a real change, and the right software makes it a non event rather than a headache.
The key for a sole trader is matching the tool to the size of the problem. You do not need a full double entry ledger, you need something that records income and expenses, handles Self Assessment and sends the quarterly updates without ceremony. We have ranked the options that do exactly that, on simplicity, price and how well they handle the new rules.
What to look for in UK accounting software
Start with Making Tax Digital. Any accounting software you choose should be recognised by HMRC for MTD for VAT, and increasingly for Income Tax too, so that you can keep digital records and file returns directly rather than through a workaround. This is now a baseline requirement rather than a nice to have, and every option we recommend clears it.
Beyond compliance, weigh four things. First, the real cost, which means the renewal price excluding VAT rather than a first year discount, and whether payroll is included or charged separately, because that single factor can flip which product is cheapest. Second, bank connectivity and reconciliation, since this is where you will spend most of your time and a good feed saves hours every month. Third, whether it handles any sector specifics you need, such as CIS for construction or multi currency for importers. And fourth, whether your accountant already knows it, because collaboration is far smoother when you both work in the same system.
How we assessed these tools
Every product here was judged on the things that actually decide whether software works for a UK business: the real published price excluding VAT, how it handles HMRC obligations such as Making Tax Digital, RTI or CIS where relevant, the depth of the core job it is bought for, how quickly a non specialist can get productive, and the quality of UK support. We read each vendor's own pricing pages rather than repeating third party figures, and we weight verified user ratings from people who run these tools day to day.
We also try to be honest about fit rather than crowning a single winner, because the right tool for a ten person business is rarely the right tool for a two hundred person one. Each entry below carries its real starting price, its current Assaylist rating and a clear note on who it suits and where it falls short, so you can match the software to your own situation rather than to an average. Where we earn a commission from an outbound link we say so, and it never changes the order of this list.
The best options ranked
1. FreeAgent
FreeAgent is purpose built for the self employed and single director company, and it is free for as long as you bank with NatWest, RBS, Ulster or Mettle. The tax timeline showing exactly what is owed and when takes the anxiety out of Self Assessment, which is worth a great deal on its own.
What you get: A UK accounting product owned by NatWest, aimed squarely at limited company contractors and sole traders. Free for as long as you bank with the group. It holds a 4.0 out of 5 rating across 497 reviews on Assaylist.
Pricing: The plans run Free with NatWest, RBS, Ulster or Mettle at free, Sole trader at £19 and Limited company at £33 per month, excluding VAT.
Why we rate it:
- Free with a NatWest, RBS, Ulster or Mettle account
- Built for UK limited company contractors
- Tax timeline showing what is owed and when
- Corporation Tax and dividend handling
Bear in mind: the free tier depends on keeping the qualifying bank account.
Read our full FreeAgent review →
2. QuickBooks Sole Trader
QuickBooks Sole Trader has the best automatic mileage tracking of any tool here, detecting trips and letting you swipe to classify them. For a tradesperson or anyone who drives for work, the tax relief that recovers typically pays for the subscription several times over.
What you get: A cut down QuickBooks built for sole traders facing Making Tax Digital for Income Tax, with mileage tracking and Self Assessment preparation. It holds a 4.0 out of 5 rating across 222 reviews on Assaylist.
Pricing: The plans run Sole Trader Plus at £9 per month, excluding VAT.
Why we rate it:
- Best in class automatic mileage tracking
- MTD for Income Tax ready
- Self Assessment preparation
- Strong mobile app
Bear in mind: there is no free tier, unlike some rivals.
Read our full QuickBooks Sole Trader review →
3. Sage Sole Trader
Sage Sole Trader is built specifically for the Making Tax Digital for Income Tax deadline, and unusually it offers a genuinely free tier for non VAT registered sole traders. It does the quarterly updates and Self Assessment with the least possible ceremony, which is exactly right for a first time user.
What you get: Sage's entry level tool for self employed people facing Making Tax Digital for Income Tax. There is a genuinely free tier for non VAT registered sole traders. It holds a 4.1 out of 5 rating across 217 reviews on Assaylist.
Pricing: The plans run Sage Sole Trader Free at free and Sage Sole Trader at £7 per month, excluding VAT.
Why we rate it:
- Free tier for non VAT registered sole traders
- MTD for Income Tax ready
- Self Assessment preparation
- UK telephone support
Bear in mind: you outgrow it the moment you register for VAT.
Read our full Sage Sole Trader review →
4. Xero
If you expect to grow, register for VAT or take on staff, starting on Xero means never facing a migration later. It is more capable than a pure sole trader tool, and its bank reconciliation and app ecosystem make it a platform you can grow into rather than out of.
What you get: The New Zealand built platform that reshaped UK cloud accounting. Four tiers, bundled payroll from the Grow plan upwards, and a very large app ecosystem. It holds a 4.1 out of 5 rating across 293 reviews on Assaylist.
Pricing: The plans run Ignite at £16, Grow at £37, Comprehensive at £50 and Ultimate at £65 per month, excluding VAT.
Why we rate it:
- Fastest bank reconciliation in the category
- Unlimited users on every tier
- Payroll included from the Grow plan
- Huge app marketplace and strong API
Bear in mind: it is more than a simple sole trader strictly needs, and priced accordingly.
Read our full Xero review →
5. Zoho Books
Zoho Books offers a free plan that actually files Self Assessment, plus property tracking that matters for landlords, making it exceptional value for a sole trader with more than one income stream. If you use other Zoho apps it all connects, and even alone it delivers well above its price.
What you get: Part of the wider Zoho suite. The UK edition files SA100 and CT600, handles MTD and CIS, and starts at nothing for one user. It holds a 4.0 out of 5 rating across 325 reviews on Assaylist.
Pricing: The plans run Free at free, Standard at £12 and Professional at £24 per month, excluding VAT.
Why we rate it:
- Free plan that files Self Assessment
- Corporation Tax filing from Standard
- Property tracking for landlords
- Native Zoho suite integration
Bear in mind: fewer UK accountants are familiar with it.
Read our full Zoho Books review →Comparison at a glance
Here is how the shortlist compares on what it is best for, the starting price excluding VAT and the current Assaylist rating.
| Software | Best for | Starting price | Rating |
|---|---|---|---|
| FreeAgent | Best for limited company contractors | From £19 / month | 4.0 |
| QuickBooks Sole Trader | Best for mileage | From £9 / month | 4.0 |
| Sage Sole Trader | Best free option | From £7 / month | 4.1 |
| Xero | Best for growth | From £16 / month | 4.1 |
| Zoho Books | Best value | From £0 / month | 4.0 |
How much should you budget?
Cloud accounting for a UK small business typically costs between fourteen and sixty pounds a month excluding VAT, depending on the tier and whether payroll is included. Entry plans around fourteen to twenty pounds suit a sole trader or a simple limited company, mid tiers around forty pounds add multi user access, quotes, forecasting and CIS, and top tiers near sixty pounds bring inventory and multi currency. Free options exist for the smallest businesses, notably QuickFile and the free tiers of Zoho Books and Sage Sole Trader.
The figure to watch is the renewal price rather than the introductory discount, since several vendors advertise heavy first year savings and then step up sharply. Factor payroll into the comparison too, because a product that bundles it can undercut one that charges separately once you add a payroll subscription. Budget on the total you will actually pay in year two, not the headline you see at sign up.
Our verdict
For a contractor running a limited company, FreeAgent is the standout, especially if you bank with the right group and get it free. For a sole trader who drives a lot, QuickBooks Sole Trader earns its place on mileage tracking alone.
If cost is the deciding factor, Sage Sole Trader's free tier and Zoho Books both handle the Making Tax Digital obligation without a bill. And if you have any expectation of growing, starting on Xero saves you a migration down the line. Match the tool to how simple your affairs really are, and the quarterly updates become something you barely notice.
The bottom line
For a limited company contractor, FreeAgent is the standout, especially free with a qualifying bank. Sole traders who drive for work should look at QuickBooks Sole Trader for mileage tracking, the cost conscious at the free tiers of Sage Sole Trader and Zoho Books, and anyone expecting to grow at Xero. Match the tool to how simple your affairs really are, and Making Tax Digital becomes something you barely notice.
Frequently asked questions
What is the best accounting software for a sole trader?
FreeAgent is the best choice for limited company contractors, especially those banking with NatWest, RBS, Ulster or Mettle who get it free. For simple sole traders, Sage Sole Trader offers a free tier, and QuickBooks Sole Trader is best for anyone with significant business mileage.
Do sole traders need Making Tax Digital software?
Making Tax Digital for Income Tax requires sole traders over the income threshold to keep digital records and send quarterly updates to HMRC using compatible software. Every tool on this list is built for that, so the right software turns a compliance obligation into a routine task.
Is there free accounting software for sole traders?
Yes. Sage Sole Trader offers a free tier for non VAT registered sole traders, Zoho Books has a free plan that files Self Assessment, and FreeAgent is free for customers of several banks. Each keeps you compliant with Making Tax Digital at no software cost.
What software do I need for Self Assessment?
Any of the tools on this list will prepare your Self Assessment figures from your income and expenses. The key features to look for are receipt capture, a clear view of estimated tax owed, and direct quarterly submission to HMRC for Making Tax Digital for Income Tax.
Can I switch accounting software as a sole trader?
Yes, though it is easiest at the start of a tax year. Check how your history transfers before you commit, since some simple tools make it harder to export a full ledger. If you expect to grow, starting on a more capable tool such as Xero avoids a switch later.
Prices were checked against each vendor's UK pricing on 6 August 2026 and exclude VAT unless stated. Vendors change pricing, so confirm the current figure on the vendor's own site before you buy. Some links are commercial; where we earn a commission it never affects our ratings or the order of this list.
