What is sole trader accounting software?
Sole trader accounting software records a self-employed person's income and expenses, connects to their bank account and files their tax to HM Revenue and Customs: the Self Assessment return and, from April 2026 for those with income over £50,000, Making Tax Digital quarterly updates. Several products have free plans.
Also calledsole trader accounting appself-employed accounting software
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- Files
- Self Assessment, MTD updates
- Default method
- Cash basis
- Free plans
- Several
What sole traders need from accounting software
Most sole traders now use cash basis by default, recording money when it comes in and goes out, and the first £1,000 of trading income is tax-free under the trading allowance. MTD for Income Tax started on 6 April 2026 for those with qualifying income over £50,000 and drops to £30,000 in April 2027 and £20,000 in April 2028; they keep digital records and send quarterly updates through software, and those with turnover under £90,000 only need to mark each transaction as income or expense. Free plans: FreeAgent is free with a NatWest, RBS or Ulster Bank business account, and Pandle, QuickFile, ANNA, Crunch and Clear Books each have a free tier. Paid plans: QuickBooks Sole Trader costs £10 a month plus VAT, Clear Books Sole Trader £5 plus VAT, Xero Ignite £18 excluding VAT and FreeAgent £19 excluding VAT. Coconut charges £129.99 a year for MTD filing, and Hammock, for landlords, starts at £8 a month.
Common questions
What is the best free accounting software for sole traders in the UK?+
FreeAgent is free with a NatWest, RBS or Ulster Bank business account. Pandle, QuickFile, ANNA, Crunch and Clear Books also have free plans; check whether the free plan includes MTD filing, which Crunch's does not.
Do sole traders need accounting software?+
From 6 April 2026 sole traders with qualifying income over £50,000 must keep digital records and send quarterly updates to HM Revenue and Customs through software, falling to £30,000 in 2027 and £20,000 in 2028. Below that, software is optional.
How much is accounting software for a sole trader?+
QuickBooks Sole Trader costs £10 a month plus VAT, Clear Books Sole Trader £5 plus VAT, Pandle Pro £5 plus VAT, Xero Ignite £18 and FreeAgent £19, excluding VAT. Most offer discounts for the first months.
Is QuickBooks good for sole traders?+
QuickBooks has a Sole Trader plan at £10 a month plus VAT for self-employed people. Compare what each plan includes for MTD quarterly updates and the Self Assessment return before choosing.
Accounting software for sole traders
XeroCloud accounting for small businesses with a large app ecosystem.Profile →
Intuit QuickBooksSmall business accounting covering books, invoicing and payroll.Profile →More sole trader software
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