Accounting software for sole traders
Sole traders are sold the same packages as limited companies and then charged for features they will never use. The entry tiers are what you actually want, and the differences between them at that price are smaller than the marketing suggests.
Prices checked 10 September 2026 · List prices per month, excluding VAT
The sole trader plans, priced #
These are the entry tiers aimed at unincorporated businesses. Every one of them files a Self Assessment return or feeds one, and all three come from the products already tracked on the accounting software comparison.
| Product | Plan | Per month | A year | What you get |
|---|---|---|---|---|
| QuickBooks | Sole Trader | £10 | £120 | Handles CIS on invoicing |
| Xero | Ignite | £18 | £216 | Up to 20 invoices and 10 bills a month |
| FreeAgent | Sole Trader | £19 | £228 | Self Assessment filing included |
Read the price you will pay in month seven #
Every vendor here runs introductory discounts, frequently 50% to 90% for the first three to six months. QuickBooks currently advertises Discounts of 50% to 90% for the first 3 to 6 months are frequent.
A plan at £1.80 for six months is £10.00 after that. The discount is not what you are buying, and every figure in the table above is the list price rather than the offer price. Whatever you sign up to, put a reminder in for the month the discount ends.
Do sole traders need accounting software at all? #
Right now, legally, no. A sole trader can keep records in a spreadsheet, keep the receipts, and file a Self Assessment return from those figures. Millions do.
What changes that is Making Tax Digital for Income Tax, which requires digital records and quarterly updates submitted through compatible software rather than one annual return. It is being phased in by income level, so the date it applies to you depends on your turnover. If you are near a threshold, the software question stops being optional and becomes a deadline.
Until then, the honest test is whether software saves you time or just costs money. If you raise a handful of invoices and have one bank account, a spreadsheet and the invoice generator genuinely will do.
What actually matters at this price #
At the entry tier the products converge. Bank feeds, invoicing, expense capture and a Self Assessment output are in all of them. The things that genuinely differ are narrower and easier to check.
- CIS. Essential in construction and absent from a lot of software. QuickBooks handles it from the Sole Trader plan; FreeAgent covers it.
- Property income. If you let property, check it handles that as a separate income source rather than forcing it through as trade.
- Invoice limits. Entry plans are sometimes capped by volume rather than by feature. Cross the cap and the real price is the tier above.
- Self Assessment filing. Some plans file the return directly; others produce the figures and you type them into HMRC.
- Your accountant. If you have one, using what they already use saves more time than any feature on a comparison table.
A cheaper setup that works #
Worth stating plainly, because nobody selling software will: a sole trader with simple affairs does not need a subscription.
- Free invoicing, covered in the invoicing software comparison
- A separate business bank account, so the records sort themselves
- A spreadsheet for income and expenses, backed up
- An accountant once a year, or a return filed yourself
That costs the accountant's fee and nothing else. It stops being viable when Making Tax Digital reaches you, when the transaction volume gets past what you will reconcile by hand, or when you incorporate.
What you legally have to keep, with or without software #
This is the part that decides whether software is solving a problem you actually have. The obligation is on the records, not on the tool.
A sole trader must keep records of all sales and income, all business expenses, VAT records if registered, PAYE records if employing anyone, and personal income. They have to be kept for at least five years after the 31 January filing deadline for that tax year, and longer if a return was filed late or is under enquiry.
Nothing in that says the records have to be in software. What it does say is that they have to survive five years, be complete, and be produceable on request. A shoebox of receipts meets none of those tests well. A spreadsheet that is backed up meets all of them.
If you cannot produce a record, HMRC can estimate the figure instead, and its estimate does not tend to favour you. That risk, rather than convenience, is the real argument for keeping books properly, whichever tool you use to do it.
The cost that is not on the price list #
Two costs that never appear in a comparison table and frequently exceed the subscription.
Your time learning it. Accounting software is only cheap if you already understand double entry well enough to spot when it has categorised something wrongly. A misfiled transaction is a wrong tax return, and the software will not tell you.
Getting out again. Data export between packages is rarely clean. Switching after two years usually means either paying to keep the old subscription alive for access, or accepting that the history stays behind. Choose as though you will be there for a while.
If you are thinking of incorporating #
Do that calculation before buying software priced for a limited company. The tax answer changed on 6 April 2026 and a sole trader now keeps more than a company director at most profit levels where all the profit is withdrawn.
The sole trader vs limited company calculator runs the same profit both ways. It is a bigger decision than which subscription to take, and it changes which plan you need.
Common questions #
What is the best accounting software for a sole trader?
The cheapest plan that files what you need. For a sole trader the entry tiers start at £10 a month, and the differences between them at that level are small. Pick on whether it handles your specific situation, such as CIS or property income, rather than on feature lists.
How much does accounting software for a sole trader cost?
Entry plans aimed at sole traders run from about £10 to £19 a month excluding VAT, which is £120 to £228 a year. Introductory discounts of 50% to 90% are common and expire.
Do sole traders need accounting software?
Not legally, today. A spreadsheet and receipts are sufficient for Self Assessment provided the records are accurate and kept. That changes as Making Tax Digital for Income Tax rolls out, which will require digital records and quarterly updates through compatible software.
Is there free accounting software for sole traders?
For invoicing, yes. For full bookkeeping with bank feeds and Self Assessment filing, genuinely free options are rare and usually limited by transaction volume. Free invoicing plus a spreadsheet is a reasonable setup for a sole trader with simple affairs.
Does sole trader software handle CIS?
Only some of it. QuickBooks handles CIS from its Sole Trader plan upward and FreeAgent covers it. That single requirement narrows the field faster than price does for anyone working in construction.
Should I get software or an accountant?
They are not alternatives. Software records the transactions; an accountant checks the treatment and files the return. Plenty of sole traders use free tools and an accountant once a year, which is often cheaper than a subscription plus doing it yourself.