Xero vs QuickBooks UK is one of the first decisions a new business makes, and one of the most common questions we get from clients switching accountant. This guide compares the two on current UK prices, Making Tax Digital, payroll, CIS, stock and ease of use. Prices were checked on the Xero and QuickBooks UK websites in September 2026 and exclude VAT. Prices change often, so check each provider’s pricing page before you buy.
The short answer: for most UK sole traders, limited companies and landlords, Xero is the easier platform to live with, mainly because its plans include unlimited users and it connects cleanly with the apps small businesses already use. QuickBooks can be cheaper for a sole trader working alone or a construction business that needs CIS, and its Plus and Advanced plans suit businesses that want deeper budgeting and project reporting. Both are recognised by HMRC for Making Tax Digital for VAT and for Income Tax.
- Xero vs QuickBooks UK prices in 2026
- Making Tax Digital
- Payroll
- CIS for construction businesses
- Stock, multi-currency and projects
- Ease of use and bank reconciliation
- Which software suits which business?
- Why your accountant’s platform matters
- The verdict
- Frequently asked questions
Xero vs QuickBooks UK prices in 2026
Both platforms sell monthly subscriptions in tiers, and both currently offer new customers 90% off for the first six months. The full monthly prices below are what you pay after that introductory period.
Xero UK plans
| Plan | Price per month | What you get |
|---|---|---|
| Simple | £7 | For businesses that are not VAT-registered. Up to 10 invoices and quotes, no bills and no VAT returns. |
| Ignite | £18 | 20 invoices and 10 bills a month, VAT returns, payroll at £1.50 per person. |
| Grow | £39 | Unlimited invoices and bills, payroll for one person included. |
| Comprehensive | £55 | Adds multi-currency, payroll for five people included. |
| Ultimate | £70 | Adds projects, payroll for ten people included. |
Xero raised its UK prices on 1 September 2026, so older comparisons quoting lower figures are out of date. CIS is a £5 a month add-on on any plan. See the Xero pricing page for the latest figures.
QuickBooks Online UK plans
| Plan | Price per month | What you get |
|---|---|---|
| Sole Trader Plus | £10 | One user, Making Tax Digital for Income Tax and CIS. No VAT returns and no payroll. |
| Simple Start | £16 | One user, adds VAT returns. |
| Essentials | £38 | Three users, adds multi-currency. |
| Plus | £56 | Five users, adds stock tracking and projects. |
| Advanced | £123 | 25 users and more advanced reporting. |
QuickBooks payroll is a separate add-on: Core at £5 a month plus £1.50 per employee, Premium at £10 plus £2 and Elite at £15 plus £3. See the QuickBooks pricing page for the latest figures.
Which is cheaper?
For a sole trader who is not VAT-registered and works alone, Xero Simple at £7 or QuickBooks Sole Trader Plus at £10 are the cheapest options, and QuickBooks includes CIS in that price. Once you are VAT-registered, the entry points are Xero Ignite at £18 and QuickBooks Simple Start at £16, but Ignite caps you at 20 invoices and 10 bills a month. For a typical limited company with unlimited transactions and a director on payroll, Xero Grow at £39 compares with QuickBooks Essentials at £38 plus a payroll add-on. The bigger difference is users: QuickBooks limits how many people can log in on each plan, while Xero does not, which matters when a director, a bookkeeper and an accountant all need access.
Making Tax Digital
Making Tax Digital for VAT applies to every VAT-registered business, whatever its turnover and both platforms file VAT returns directly to HMRC. The exceptions are the two entry plans: Xero Simple and QuickBooks Sole Trader Plus cannot submit VAT returns, so a VAT-registered business needs Xero Ignite or QuickBooks Simple Start as a minimum.
Making Tax Digital for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Both Xero and QuickBooks describe every current plan as ready for MTD for Income Tax, including the quarterly updates and the final declaration. Either will do the job, and the more important step is setting up your categories correctly so each quarterly update is accurate.
Payroll
Xero builds payroll into its plans: Grow includes one person, Comprehensive five and Ultimate ten, with extra people charged at £1.50 each (£1 on Ultimate), while Ignite charges £1.50 per person from the first employee. QuickBooks charges for payroll as a separate add-on and does not offer it on Sole Trader Plus. Both handle RTI submissions to HMRC, payslips and pension auto-enrolment. For a one-director company, Xero Grow is usually the simpler package. For larger teams, compare the total cost at your headcount or outsource payroll so the software choice matters less.
CIS for construction businesses
Both platforms calculate CIS deductions and produce the monthly return. QuickBooks includes CIS on every plan, including Sole Trader Plus, while Xero charges £5 a month for its CIS add-on. For a small subcontractor, that makes QuickBooks slightly cheaper. For a contractor paying several subcontractors, the reliability of the monthly routine matters more than £5, and either platform works well when set up properly. Read more about our CIS returns service and our work with construction and trades businesses.
Stock, multi-currency and projects
If you hold stock, Xero includes tracked inventory on Ignite and above for up to 4,000 items, valued at average cost, with cost of goods sold calculated automatically. QuickBooks only includes stock tracking on Plus and Advanced, from £56 a month. Our guide to stock and inventory in Xero explains tracked and untracked items. Larger e-commerce sellers often add a specialist inventory app to either platform.
Multi-currency starts on Xero Comprehensive at £55 and on QuickBooks Essentials at £38. Project tracking is on Xero Ultimate at £70 and QuickBooks Plus at £56.
Ease of use and bank reconciliation
Xero tends to suit business owners with no accounting background. The dashboard is clean, bank feeds are reliable and the reconciliation screen is quick to learn, which cuts down the coding errors that cause problems at year end. QuickBooks packs more into each screen, which experienced users like, and its reporting and budgeting tools are stronger on the higher plans. Both connect to the major UK banks, Stripe, PayPal and Shopify and both have mobile apps for receipts and invoices. Our guide to setting up Xero for a small business shows what the first month looks like.
Which software suits which business?
- Sole traders not registered for VAT: Xero Simple or QuickBooks Sole Trader Plus. QuickBooks is the better value if you work in construction and need CIS.
- VAT-registered sole traders and freelancers: Xero Ignite if you raise fewer than 20 invoices a month, otherwise Xero Grow or QuickBooks Essentials.
- Limited companies: Xero Grow is the usual choice, with payroll for one director included and unlimited users for your accountant and bookkeeper.
- Landlords: either platform meets Making Tax Digital for Income Tax. Xero makes it easy to track income and costs by property using tracking categories.
- E-commerce and retail: Xero, for its stock tracking from Ignite upwards and its store and marketplace integrations. See our guide to connecting your store to Xero.
- Businesses needing detailed budgeting and project reporting: QuickBooks Plus or Advanced, or Xero Ultimate.
Why your accountant’s platform matters
If your accountant works mainly in one platform, using the same software saves time and money. They can review transactions directly, fix coding errors as they happen and prepare your annual accounts without exports or spreadsheets going back and forth.
At NDCA we run our clients on Xero, and we move businesses across from QuickBooks, Sage and FreeAgent as part of onboarding. If you are starting fresh, speak to your accountant before you subscribe. A ten-minute conversation saves months of work if you would otherwise end up on the wrong plan.
The verdict
For most UK small businesses, Xero is the stronger all-round choice: unlimited users, payroll included from Grow, stock tracking from Ignite and a cleaner reconciliation screen. QuickBooks wins on price for a lone sole trader, above all one who needs CIS, and on reporting depth at the top end. Whichever you choose, set it up properly from the first month, because migrating in the middle of a year creates reconciliation work and messy opening balances. If you want help choosing or setting up, our bookkeeping service includes Xero setup and migration.
Frequently asked questions
Is Xero or QuickBooks better for sole traders in the UK?
If you are not VAT-registered and work alone, either entry plan does the job. QuickBooks includes CIS in that price, which suits construction subcontractors. Xero is usually easier to learn if you have no accounting background.
Which is cheaper, Xero or QuickBooks?
It depends on the plan you need. QuickBooks is cheaper at the very start for VAT-registered businesses (£16 against £18), but Xero includes payroll on its main plans and does not limit users. Compare the total cost of the plan, payroll and any add-ons you need, not the headline price.
Are both Xero and QuickBooks ready for Making Tax Digital?
Yes. Both file VAT returns to HMRC under Making Tax Digital on their VAT-enabled plans, and both describe every current plan as ready for Making Tax Digital for Income Tax.
Which is better for CIS?
Both handle CIS deductions and monthly returns. CIS comes free on every QuickBooks plan and costs £5 a month on Xero.
Can I switch from QuickBooks to Xero part way through the year?
Yes, but it takes care. Opening balances in the new platform must match the closing figures in the old one, and unpaid invoices and bills need moving across. The cleanest time to switch is at the start of a VAT quarter or a new financial year, with your accountant handling the migration.
Does my accountant need to use the same software as me?
Not strictly, but it makes working together faster and cheaper. When your accountant works directly in your file, errors are corrected as they happen rather than at year end.
Need help with your bookkeeping?
NDCA is an ACCA-regulated accountancy practice with fixed monthly fees and a named accountant. Book a free consultation and pick a time that suits you.
Areas we cover
NDCA works with clients across the following regions. If you are based in one of these areas, our team can help with the accounting issues covered in this article.
