Xero review
Full cloud accounting · by Xero · HMRC-recognised
Full cloud accounting. The Simple plan is purpose-built for MTD for Income Tax with bank-feed automation, so you do less typing.
Our verdict
Xero is the safe, grown-up choice: proper double-entry accounting that almost every UK accountant already knows, with bank feeds that cut the data entry quarterly MTD updates would otherwise create. It's rarely the cheapest option on this site, and it's more software than a very simple sole trader strictly needs — but if you want bookkeeping you won't outgrow, it's hard to regret. New customers can usually land a sizeable introductory discount for the first few months, but budget on the standard price for the long run.
At a glance
- Self-employment
- Yes
- Property / rent
- Yes
- Keeps your spreadsheet
- No
- Accountant access
- Yes
- Price verified
- 2026-08-03
- HMRC status
- Recognised
Plans & true annual cost
| Plan | Self-emp. | Property | Per year (incl. VAT) |
|---|---|---|---|
Simple Built for sole traders under MTD for Income Tax; bank feeds and quarterly updates. | ✓ | ✓ | £100.80/yr £84/yr ex-VAT |
Ignite Adds invoicing, bills and fuller reporting. | ✓ | ✓ | £230.40/yr £192/yr ex-VAT |
Offer: 80% off for the first 6 months.
Pros & cons
What's good
- Full double-entry cloud accounting, not a stripped-back filer — your records stay usable as the business grows
- Bank feeds and automatic reconciliation do most of the data entry for you, which matters once you're filing every quarter
- One of the most widely used platforms in UK practices, so finding an accountant who already works in it is easy
- Large app marketplace (payroll, expenses, e-commerce) if you ever need to bolt more on
- The entry-level Simple plan is built for MTD for Income Tax rather than retro-fitted to it
What's not
- Rarely the cheapest route to MTD compliance — bridging tools and some landlord apps undercut it
- No permanent free tier, unlike FreeAgent with the right bank account
- More features (and more interface) than a single-income sole trader may ever touch
Who it's for
- Sole traders who want proper bookkeeping
- People who want bank feeds to do the work
…and who should look elsewhere
- Spreadsheet diehards who only want to file — a bridging tool keeps your spreadsheet for less
- NatWest, RBS, Ulster or Mettle customers, who can get FreeAgent free for life
- Landlords with property income only, who may find a property-specialist tool cheaper and better fitted
- Anyone whose single priority is the rock-bottom price
Common mistakes to avoid
- Assuming the cheapest 'from' price covers you — check the plan you pick actually supports all your income types
- Paying for the higher Ignite plan when the Simple plan already covers a straightforward MTD filer
- Comparing Xero's ex-VAT price against a rival's VAT-inclusive price instead of like for like (the figure above is VAT-inclusive)
- Buying before checking whether your business bank account unlocks a free alternative
Frequently asked questions
- Is Xero good for Making Tax Digital for Income Tax?
- Yes — Xero is HMRC-recognised for MTD for Income Tax, and its entry-level Simple plan is built specifically for it, including the quarterly updates and bank feeds that keep the filing manageable.
- What is the cheapest Xero plan for MTD for Income Tax?
- The Simple plan is the cheapest tier that covers a typical sole trader or landlord under MTD; its true VAT-inclusive annual cost is shown above. Check it still fits if you have multiple income sources or need invoicing, which push you up to the Ignite plan.
- Does Xero handle property or rental income?
- Yes. Xero can record property income alongside self-employment, so landlords and people with both income types are covered. If you only have rental income, a property-specialist tool may fit better — see the alternatives above.
- Can my accountant access my Xero account?
- Yes. Xero supports agent access, so you can invite an accountant or bookkeeper, and it's one of the most widely used platforms in UK practices — so finding one who already knows it is straightforward.
- Is there a free version of Xero?
- No — Xero has no permanent free tier. If a free option is your priority, FreeAgent is free for life with a NatWest, RBS, Ulster or Mettle account; otherwise compare the true annual costs across this site.
Alternatives to consider
Free for life if you bank with NatWest, RBS, Ulster or Mettle — potentially £0 against Xero's monthly fee.
Comparable full accounting with a lower entry price and frequent first-year discounts.
Another established full-accounting option if you or your accountant already live in Sage.
Compare Xero with
See Xero ranked
Pricing for Xero was last verified on 3 August 2026 against the vendor's page; the catalogue was reconciled 3 August 2026. Its cheapest plan's true annual cost is £100.80/year. Links are affiliate links and never affect ranking. Not affiliated with HMRC; not tax advice.