Placeholder comparison — to be rewritten with hands-on testing before launch.
Both FreeAgent and Xero are on the HMRC MTD Income Tax recognised-software list, so either one will keep you compliant from April 2026 onward. The question is which one suits your way of working. This page is a quick side-by-side — see the full FreeAgent review and Xero review for depth.
Side-by-side comparison
| Feature | FreeAgent | Xero |
|---|---|---|
| Starting price | From £11/month + VAT | From £16/month |
| HMRC MTD Income Tax recognised | Yes | Yes |
| Bank feeds | Good (UK banks) | Excellent (largest coverage) |
| Invoicing | Built-in, opinionated | Built-in, customisable |
| Time tracking & mileage | Yes (first-class) | Add-on required |
| App marketplace | ~50 integrations | ~1,000+ apps |
| Mobile app | Solid | Solid |
| Best for | UK sole traders & micro limited companies who want a simple all-in-one package | Sole traders & landlords who want a mature ecosystem and lots of integrations |
Who should pick FreeAgent?
Pick FreeAgent if you are a UK sole trader or micro limited company director who wants a single opinionated package without needing to choose between dozens of apps. Time tracking and mileage are first-class features; the invoicing flow is simple and friendly. If you bank with NatWest, the free tier is a major advantage.
FreeAgent: Affiliate link pending enrolmentWho should pick Xero?
Pick Xero if you want flexibility — the largest UK app marketplace, the broadest bank-feed coverage, multi-currency on higher tiers, and the strongest project-tracking features. If you have more complex reporting needs (cost centres, classes, tracking categories), Xero wins.
Xero: Affiliate link pending enrolmentBoth are MTD Income Tax ready
For the strict April 2026 MTD requirement — quarterly updates and a final declaration — either package is fine. Your choice should be driven by what you actually do day-to-day: time-tracking heavy → FreeAgent; app ecosystem heavy → Xero.