UK guide

Free vs paid accounting software for UK sole traders

Free accounting tiers are genuinely useful at low volume — until a usage limit or a tax requirement forces an upgrade. The honest question is not "free or paid?" but "does the paid tier remove more cost in time and compliance risk than it adds in subscription?" This page shows what free usually covers, what it does not, and how to decide.

What free tiers usually include

• Basic income and expense logging, usually with manual entry.
• A small number of invoices per month, often with the provider's branding.
• One user and a single business or bank connection.
• Simple reports (profit summary, expense categories) with limited history.

What free tiers usually exclude

• Making Tax Digital for Income Tax submission (MTD for Income Tax began April 2026 for many sole traders).
• Automated bank feeds, or feeds beyond one account.
• Multiple users so your bookkeeper can log in directly.
• Receipt capture, recurring invoices, or removing provider branding.

→ Making Tax Digital for Income Tax: sole trader checklist (2026)

Usage limits that force an upgrade

Free tiers are priced to work until you become a real business. These are the moments a paid plan usually stops being optional.

• You cross the free transaction or invoice cap and start deleting old records to stay under it.
• You need to file VAT or MTD for Income Tax from inside the tool rather than exporting.
• You want a second user (accountant/bookkeeper) with their own login.
• Manual bank reconciliation is eating an hour or more each week.

The total-cost math (time, not just price)

A £10–£15/month plan looks expensive next to £0 — until you price your own time. If a paid tier saves two hours a month on reconciliation and filing, and your time is worth more than the subscription per hour, the paid tier is cheaper in real terms. Compare time saved and compliance risk removed, not the sticker price.

→ Spreadsheet vs accounting software (when either is enough)

When staying on the free tier is the right call

• Low transaction volume you can review line-by-line yourself.
• No VAT registration and no MTD filing obligation yet.
• A single income stream and a separate business bank account you already reconcile.
• You are still validating the business and do not want a monthly cost.

Trial checklist before you pay

1. Step 1

   Confirm the exact free-tier limits (transactions, invoices, users, history) in writing on the pricing page.

2. Step 2

   Check bank-feed support for your specific UK bank before you rely on it.

3. Step 3

   Test whether MTD / VAT filing is on the free tier or paid-only for your situation.

4. Step 4

   Do the math: monthly paid cost vs the hours the free tier costs you — time saved is the real comparison, not price alone.

5. Step 5

   Export a sample month so you know you can leave without losing your data.