Xero and Zoho Books sit at opposite ends of the same decision for a UK owner. If you pay staff, or want your accounts at the centre of a wide app and accountant ecosystem, pick Xero. If you run a small business with no employees, file your own Self Assessment, want a low ledger cost or a free plan to start on, and would use the rest of the Zoho suite, pick Zoho Books. Everything below is about which of those two descriptions is really you.
Plans and pricing checked October 2026, and every figure below is read live from our pricing database, the same data as the table and calculator above.
Xero vs Zoho Books pricing: monthly against annual billing
Xero's entry plan is £18/mo (Ignite), billed monthly with no contract. Zoho Books' entry plan is £10/mo (Standard, annual), the annual-billed figure: Zoho publishes a monthly price and a lower one for paying a year up front, and our table shows the annual-billed one, labelled as such, so the two are not on the same footing. Zoho Books also has a free plan for businesses under a revenue threshold, which Xero does not offer, though Xero does sell a cheaper plan for businesses not registered for VAT.
Mid-range, Xero's is £39/mo (Grow) against Zoho Books' £20/mo (Professional, annual), again with Zoho's figure on annual billing. At the top, Xero's is £70/mo (Ultimate) and Zoho Books' is £165/mo (Ultimate, annual). The two ladders do not line up rung for rung, so compare the plan that has the features you need on each side. The comparison table on this page carries each plan's current figure, and the calculator above folds your invoice count, user count and headcount into one estimated monthly cost per platform.
Who is Zoho Books for, and who is Xero for?
Zoho Books is a ledger first and a suite member second. Zoho sells CRM, inventory and many other business tools under one login, so an owner who already runs sales and stock in Zoho gets a connected set rather than a pile of integrations. Bank feeds and API access start on Standard rather than Free, and users and invoices are capped on the lower plans, with extra users charged on top.
Xero gives every plan unlimited users, so a growing team, a bookkeeper and an accountant all work in the same file at no per-seat cost. Its app marketplace and UK accountant network are wider than Zoho's, which matters if your accountant already works in it. The trade-off is an invoice cap on the entry plan, which pushes a busier business up a tier.
Xero vs Zoho Books on payroll and CIS
Payroll is the deciding gap, and it is one-sided. Zoho Books has no payroll, and Zoho's payroll product is not sold in the UK, so a business with employees needs a third-party payroll product beside the ledger for PAYE and RTI, priced in on top. Xero builds payroll into its accounting plans. It is not free: Ignite charges for every person paid, the higher plans each include a number of people that rises with the plan, and everyone beyond that is charged per person. The real cost depends on your headcount, and the calculator above is where to see it.
CIS is closer than you might expect. Zoho Books tracks CIS contractors from the free plan and submits CIS returns to HMRC from Professional. Xero runs CIS calculations and reports on every plan, and only submitting the contractor return is an optional monthly add-on, so a subcontractor who just needs deductions tracked may need nothing extra on either.
- CIS: Xero Yes (filing add-on), Zoho Books Yes (returns: Professional)
Do both handle Making Tax Digital and Self Assessment?
Both file MTD VAT returns to HMRC, Zoho Books from its free plan and Xero on every VAT-capable plan, so for a VAT-registered limited company the two are level. For a sole trader the difference is the return itself. Zoho Books files the Self Assessment return to HMRC from its free plan and supports MTD for Income Tax on it. Xero lists itself as MTD for Income Tax ready on every plan but does not list a Self Assessment return feature on its pricing page, and sells an optional annual add-on for company accounts and tax. Read the two cells below if you file your own return.
- MTD for Income Tax: Xero Yes, Zoho Books Yes
- Self Assessment: Xero No, Zoho Books Yes
What else separates them day to day?
Multi-currency arrives on Xero from Comprehensive and on Zoho Books from Professional, so neither includes it at entry. Project tracking sits on Xero's Ultimate plan only, where Zoho Books covers a small number of projects on Free and projects on every paid plan. Zoho Books also has a dedicated inventory product in the same suite for stock that outgrows the ledger.
- Inventory: Xero Limited, Zoho Books Yes (Professional)
- Project tracking: Xero Yes (Ultimate), Zoho Books Yes
- Receipt capture: Xero Yes (Hubdoc), Zoho Books Yes
- Support: Xero 24/7 online, Zoho Books Email / voice / chat
AI assistants and agent access
Both have a native assistant and both publish an official MCP server, so an AI agent can be pointed at either ledger directly. On today's data neither has a structural edge here, so do not let it decide the matchup.
- Assistant: Xero Native (JAX), Zoho Books Native (Zia)
- Agent access: Xero Native MCP (official), Zoho Books Native MCP (Zoho, official)
Pros and cons for this matchup
Xero wins on built-in payroll, unlimited users on every plan, month-to-month billing, CIS calculations on every plan and the wider UK app and accountant ecosystem. Its weak spots are the invoice cap on the entry plan, a per-person payroll charge that grows with your team, no free plan, and no Self Assessment return feature listed.
Zoho Books wins on a free plan under a revenue threshold, Self Assessment filing from that free plan, projects on every plan, receipt capture on every tier and a seat inside a suite that covers CRM and inventory. Its weak spots are no payroll and no UK payroll option from Zoho, annual billing behind the figure in our table, capped users and invoices on the lower plans, and bank feeds and CIS return submission that start on paid plans.
The verdict
Pick Xero if you employ anyone, or want unlimited users and an accountant who already lives in it: the per-person payroll charge is real, but it is one product and one bill, and the calculator shows it at your headcount. Pick Zoho Books if you have no employees, file your own Self Assessment, want the free plan or a low annual-billed ledger, and would use the rest of the Zoho suite, because then its one real gap costs you nothing. Whatever you pick, do not compare the two headline figures as if they were billed the same way: the table and calculator on this page exist to show the difference.