FreshBooks vs Xero
Both are full cloud accounting tools for Making Tax Digital for Income Tax.
Xero is the cheaper starting point at from £100.80/yr (VAT included) versus from £216/yr for FreshBooks — but the cheapest plan only wins if it covers the income types you actually have.
| FreshBooks | Xero | |
|---|---|---|
| True annual cost from | from £216/yr | from £100.80/yr |
| Self-employment | Yes | Yes |
| Property / rent | No | Yes |
| Keeps your spreadsheet | No | No |
| Accountant access | Yes | Yes |
| Type | full cloud accounting | full cloud accounting |
| HMRC status | Recognised | Recognised |
| Price verified | 2026-06-24 | 2026-06-24 |
FreshBooks
Invoicing-first accounting aimed at service freelancers. Great if you bill clients; not built for landlords.
- Freelancers who live in invoices
- Service businesses with no property income
Xero
Full cloud accounting. The Simple plan is purpose-built for MTD for Income Tax with bank-feed automation, so you do less typing.
- Sole traders who want proper bookkeeping
- People who want bank feeds to do the work
Not sure either is right? Use the finder to get a recommendation ranked by what it will actually cost you.
Prices are the cheapest plan that covers a typical sole trader or landlord, VAT included, last verified 24 June 2026 (catalogue reconciled 24 June 2026). Links are affiliate links and never affect ranking. Not affiliated with HMRC; not tax advice.