Best Accounting Software for Sole Traders in the United Kingdom (2026)

If you work for yourself, as a sole trader, freelancer or self-employed tradesperson, your accounting software has one job above all: get your income and costs into a tax return without a January scramble. For some sole traders it now has a second job. Since 6 April 2026, MTD for Income Tax has required quarterly updates sent from software by sole traders and landlords whose qualifying income was over £50,000 in the 2024 to 2025 tax year, and the line falls to £30,000 from April 2027 and £20,000 from April 2028.

This guide is for people whose self-employment is their business. If you have a salaried job and sell or freelance on the side, our guide to accounting software for side hustles covers the £1,000 trading allowance and how side income is taxed on top of your salary.

How we chose. A one-person business mostly needs its tax return done cheaply, so we read every one of the 10 accounting tools in our UK data with that in mind, using costs from the engine behind our accounting software comparison. We weighted four things: a free or low-cost route, support for MTD for Income Tax, help with the Self Assessment return, and a way to grow into VAT or a first employee without switching. The table above opens at 10 invoices a month, one user, no employees and not VAT registered; change any of them and it re-prices. Earning a commission from a vendor never earned it a place here.

Do sole traders and the self-employed need accounting software?

Not every sole trader does, yet, but every sole trader must keep records. GOV.UK says that once you earn more than £1,000 in a tax year from self-employment you must register for Self Assessment, and that you must keep records of your business income and expenses for your tax return. Below £1,000 the trading allowance usually means you do not need to tell HMRC at all.

How you keep those records is up to you until MTD for Income Tax reaches you. A spreadsheet is lawful. The cash basis, where you count money when it arrives and leaves, is now the standard way for a sole trader to record income and expenses, though you can choose traditional accounting instead.

Software earns its fee in three places a spreadsheet does not. A bank feed pulls in every payment so nothing is typed twice. A receipt photographed on the day is filed against the cost it proves. And at the end of the year your profit is already added up, whether you file the return yourself or pass it to an accountant.

Does a sole trader's accounting software need to be MTD compatible?

MTD for Income Tax, HMRC's Making Tax Digital rules for Income Tax, makes compatible software compulsory once your qualifying income, your self-employment and property income before expenses, passes the threshold for your year. From then on the software keeps a digital record of each transaction, sends HMRC a quarterly update and submits the year-end tax return; a spreadsheet linked to bridging software also counts. Our guide to MTD software sets out each year's threshold, the quarterly calendar and the penalty rules. If you also let a property, our guide to accounting software for landlords covers keeping rental records property by property.

Here is how the four picks handle it. In these two columns, a plan name in brackets means the feature starts on that plan.

Crunch is the one to read closely. It has three plans: an ad-supported free plan, £4/mo (Lite), and £10/mo (Plus). The cost table prices the free plan, but bank feeds, VAT returns and MTD for Income Tax all start on Plus.

HMRC keeps its own finder for compatible software and does not recommend any product; the full comparison has the MTD column for every provider we list.

Is there free bookkeeping software for sole traders?

Yes, but each one stops somewhere. FreeAgent is free while you bank with NatWest, RBS or Ulster Bank, or use Mettle monthly; otherwise it is £19/mo (Sole Trader). Zoho Books has a free plan that feeds one bank account, and feeds for more than one start on its first paid plan, £10/mo (Standard, annual). Crunch's free plan carries ads. QuickBooks Online has no free plan; the plan in our table is £16/mo (Simple Start).

Prices are each vendor's published monthly figure, normally before VAT; we do not add or remove VAT. Plans and pricing checked October 2026.

The bank feed is the line that matters most for a one-person business: without it, every payment is typed in or uploaded from a statement. FreeAgent's free route is a full licence, not a cut-down plan, but it is tied to the bank account, so if you close the account you move to the rate card with your records inside. Zoho Books' free plan suits someone with one business bank account. Our calculator does not model the yearly invoice and expense limits on Zoho Books' free plan, so the table shows its first paid plan instead.

Which bookkeeping software files Self Assessment for sole traders and the self-employed?

Support for the Self Assessment return varies widely, so here it is for every accounting provider we list, with our wording intact:

"Yes" means the software prepares the return from your books, and with some providers, FreeAgent among them, files it direct to HMRC. "Add-on" at Crunch is a paid service in which its team prepares and files the return for you. "Limited" means some help short of the full return, so check what is covered before relying on it. "No" means you file through another product or an accountant.

The dates do not change with the software. You register for Self Assessment by 5 October after the end of the tax year in which you first need to send a return. The deadlines are 31 October for a paper return and 31 January for an online return and for paying the tax.

Whether Self Assessment support matters depends on who files. If an accountant does your return, they will use their own software and need only access to your books, so clean records matter far more. If you file it yourself, it decides the purchase, and once MTD for Income Tax applies to you, the year-end return has to go through MTD software, so check that the product sending your quarterly updates can also submit it.

When a sole trader outgrows entry-level accounting software

Three events change what you need from your accounting software.

Registering for VAT. You must register once your taxable turnover for the last 12 months goes over £90,000, or if you expect it to within the next 30 days, and you have 30 days from the end of that month to do it. From then on, VAT returns go to HMRC from software.

The VAT returns column above shows the plan that files them for each pick; on Crunch's free and ad-free plans, VAT filing is sold as an add-on.

Taking on an employee. Payroll arrives with your first member of staff. QuickBooks Online lists payroll as Yes (add-on), and Zoho Books and Crunch would need a separate payroll product. FreeAgent lists payroll as Yes (included), but its pricing page says payroll is not available if you keep your books on the cash basis, the default for sole traders. Our guide to payroll software for small business covers what HMRC and The Pensions Regulator then expect of you, and our guide to accounting software for small business compares how each provider sells payroll and extra logins once you have staff.

Becoming a limited company. A company files its own accounts and Corporation Tax, on top of, usually, your own Self Assessment as a director, so the plan changes. FreeAgent's plan for a company is £33/mo (Limited Company); your records come with you if you stay with the same provider, which is worth weighing now if incorporation is likely.

Which one, then?

Pick by your situation, not by the price column alone:

• You bank with NatWest, RBS or Ulster Bank, or use Mettle: FreeAgent, because it costs nothing and files both Self Assessment and MTD for Income Tax.
• You want to pay nothing and run one business bank account: Zoho Books on its free plan.
• You may want someone else to do your return later: Crunch, which sells that service alongside its software.
• You expect to hire within the year: QuickBooks Online, which adds payroll to the same subscription.
• You work in construction and have CIS deducted from your pay: our guide to accounting software for builders, which compares CIS support and how subcontractors get deductions back.

Until one of the events above happens, the right plan for a sole trader is usually the smallest one that files what HMRC asks of you this year.