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FreeAgent wins for most UK sole traders and landlords
FreeAgent wins for most sole traders — it is purpose-built for UK self-employment, free with NatWest, and covers all MTD ITSA requirements at a lower price than Xero. Xero wins for complex businesses and users whose accountant requires it.
At a glance
| Xero | FreeAgent | |
|---|---|---|
| Price from | £16/mo | £19/mo |
| Free tier | ✗ No | ✗ No |
| Best for | Existing Xero users who need MTD ITSA compliance | Sole traders banking with NatWest, RBS, or Ulster Bank |
| MTD ITSA | HMRC Recognised | HMRC Recognised |
| Visit Xero → | Visit FreeAgent → |
Xero vs FreeAgent: the cost-complexity trade-off
Xero (from £33/month Standard) and FreeAgent (free with NatWest, or £19/month standalone) are both HMRC-recognised for MTD ITSA. The question is whether Xero’s additional power is worth the premium for your use case.
For most sole traders: FreeAgent wins
FreeAgent is designed from the ground up for UK sole traders and freelancers. It handles every MTD ITSA requirement — quarterly updates, EOPS, final declarations — and its tax timeline is the best deadline-awareness tool available. If your income is from self-employment (services, freelancing, consulting), FreeAgent does everything you need.
If you bank with NatWest, RBS, or Ulster Bank, FreeAgent is included free — making the cost comparison irrelevant.
When Xero justifies the premium
- Multiple income streams or entities. Xero’s reporting handles complexity that FreeAgent struggles with.
- High transaction volume. Xero’s bank reconciliation rules engine is more powerful for businesses with 100+ transactions per month.
- Accountant on Xero. If your accountant works in Xero, staying on it saves accountant time and potentially money.
- Inventory or multi-currency. FreeAgent does not handle these well.
MTD ITSA capability: equivalent
Both submit quarterly updates, end-of-period statements, and final declarations directly to HMRC. For Phase 1 compliance alone, neither has an advantage.
Price comparison
| Xero | FreeAgent | |
|---|---|---|
| Cheapest plan | £16/month (Starter — limited) | £19/month (Sole Trader) |
| Standard plan | £33/month | £19/month |
| With NatWest | — | Free |
Our verdict
Choose FreeAgent if: you bank with NatWest, or you have straightforward self-employment income and want purpose-built UK sole trader software at a lower price.
Choose Xero if: your accountant uses it, you have complex finances, or you need advanced reporting.
Consider Zoho Books if: you want HMRC-recognised MTD ITSA at the lowest possible cost (free plan or £12/month).
Read the full reviews