Look, I get it. You'd rather spend your hard-earned cash on your business (or that holiday you've been promising yourself) than fork out hundreds to someone else to do your books.
BUT .. with MTD for Income Tax kicking in from April 2026 for those earning over £50,000, the clock's ticking to find software that won't make you want to throw your laptop out the window.
So I've done the research for you so don't have to start from scratch, and these are my opinions on the five main players for freelancers .. in the MTD game:
Xero - The Popular Kid (But Are They Worth The Hype?)
Target User: Small businesses, creative types, those who like things looking pretty. Pricing: £7-£59/month (that's £84-£708 a year - ouch!)
The Good Stuff ✅
Setup: Relatively painless if you can follow instructions. They hold your hand through the basics
User-Friendliness: Clean interface that doesn't look like it was designed in 1995
Bank Connections: Links to most major banks automatically - transactions just appear (when it works)
Accountant Access: Your accountant will probably love you for choosing this - most of them use it
The Reality Check ⚠️
Setup Gotchas: Can feel overwhelming with all the features you probably don't need
Hidden Costs: Those app integrations they love showing off? Most cost extra
Overkill Factor: Like buying a Ferrari to drive to the corner shop - probably more than you need
Verdict: Good if you want to grow into it and don't mind paying premium prices. It's MTD-compliant for VAT and preparing for Income Tax Self Assessment, but you're paying for bells and whistles you might never use.
Sage - The Old Reliable (With Baggage)
Target User: Traditional businesses, those who like familiarity. Pricing: Various packages - expect to pay similar to Xero
The Good Stuff ✅
Setup: Straightforward if you've used accounting software before
Reliability: Been around forever - they know what they're doing
Bank Feeds: Solid connections to major banks
Support: Decent phone support (when you can get through)
The Reality Check ⚠️
Interface: Can feel dated compared to newer options
Learning Curve: Not the most intuitive for beginners
Flexibility: Can be rigid in how it wants you to do things
Verdict: Safe choice but not exciting. HMRC recognised for MTD but lacks the user-friendly approach that makes DIY bookkeeping less painful.
FreeAgent - The Freelancer's Friend
Target User: Freelancers, contractors, sole traders who want simple. Pricing: £10-£33/month (often free with NatWest/RBS/Mettle accounts)
The Good Stuff ✅
Setup: Probably the easiest of the bunch - built for people who hate accounting
User Experience: Clean, simple, doesn't try to be everything to everyone
Bank Integration: Smooth connections, especially with partner banks
Free Option: If you bank with NatWest, RBS, or Mettle, it's completely free
The Reality Check ⚠️
Limited Features: Simple can mean lacking if your needs grow
Customisation: Less flexible than bigger platforms
Growth Limitations: Might outgrow it if you expand
Verdict: FreeAgent is involved in HMRC's MTD testing programme and is already on the list of compatible software. Perfect for straightforward businesses, especially if it's free through your bank.
Coconut - The Smartphone Generation's Choice
Target User: Mobile-first freelancers, those who live on their phones. Pricing: Free tier available, premium features cost extra
The Good Stuff ✅
Mobile-First: Built for people who manage everything on their phone
Setup: Quick and painless - designed for the TikTok generation
Bank Integration: AI categorises transactions automatically
Modern Feel: Actually looks like it belongs in 2024
The Reality Check ⚠️
Limited Desktop: Great on mobile, less impressive on desktop
Feature Depth: Can be too simple for complex businesses
Newer Player: Less track record than established providers
Verdict: Great for digital natives who want simplicity, but check MTD readiness carefully as they're still building out full compliance features.
MyTaxDigital - The Bare Bones Option
Target User: Spreadsheet lovers who just need to tick the MTD box. Pricing: FREE
The Good Stuff ✅
Price: Can't argue with free
Simplicity: Currently does one thing - submits your VAT returns. MTD for Income Tax submissions will be available.
Spreadsheet Integration: Keep your beloved Excel sheets, just use this to submit
No Learning Curve: If you can use Excel, you can use this
The Reality Check ⚠️
Limited Scope: No full bookkeeping or accounting tools, limited support for Income Tax Self Assessment
Manual Work: Still need to do all the heavy lifting yourself
Basic Support: Don't expect hand-holding
Verdict: HMRC-recognised and trusted by thousands since 2019. Perfect if you're happy doing the work yourself and just need the compliance bit sorted.
The Numbers Narrator Verdict
For the "Keep It Simple" crowd: FreeAgent wins hands down, especially if you get it free through your bank.
For the "I Want All The Features" types: Xero, but prepare for sticker shock and a learning curve.
For the "Excel Is Life" brigade: MyTaxDigital - free, functional, no fuss.
For the "Phone Is My Office" generation: Coconut, but double-check their MTD compliance timeline.
For the "Better Safe Than Sorry" folks: Sage - 'boring' but reliable.
The Bottom Line Reality Check
Here's the thing nobody tells you: the "best" software is the one you'll actually use consistently. A simple system you update regularly beats a sophisticated one you ignore until panic sets in at year-end.
With MTD for Income Tax starting in April 2026 for those earning over £50,000, you've got time to test-drive options. Most offer free trials - use them!
And remember, whichever you choose, your accountant (if you have one) needs to be able to access it too. Check they're comfortable with your choice before you commit.
The spreadsheet days are numbered, but that doesn't mean you need to break the bank on software that's more complex than your actual business.
What Next?
Looking for additional support in selecting or setting up your choice of software? Book a date for a free quick chat or for more intensive support grab a power hour
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