Xero vs Sage: best MTD software in 2026

Xero

From £7/month

Aimed at: Sole traders & landlords who want a mature ecosystem and lots of integrations

4.3/5

Try Xero Read the full review →

Sage

From £14/month

Aimed at: Established UK businesses & landlords who want a recognisable UK brand

4.0/5

Try Sage Read the full review →

Last verified on 30 September 2026. Sources: Xero and Sage provider websites, and the HMRC list of MTD software . Prices may include VAT or be promotional and can change at any time.

Xero and Sage Accounting are both HMRC-recognised for MTD Income Tax. Xero is sole traders & landlords who want a mature ecosystem and lots of integrations; Sage Accounting is vat-registered businesses or those with complex accounting needs.

Quick comparison

	Xero	Sage Accounting
Pricing	From £7/month (Simple) to £33/month (Grow)	From £14/month (Start) to £36/month (Plus)
Best for	Sole traders & landlords who want a mature ecosystem and lots of integrations	VAT-registered businesses or those with complex accounting needs
Free tier	No	No
Bank feeds	Yes	Yes
Multi-currency	No	Yes
Invoicing	Yes	Yes
Mobile app	Yes	Yes

Xero overview

Xero is sole traders & landlords who want a mature ecosystem and lots of integrations. Key strengths: 1,000+ integrations, 50+ bank feeds, Scales well. Limitations: No free tier, Steeper learning curve.

Sage Accounting overview

Sage Accounting is vat-registered businesses or those with complex accounting needs. Key strengths: Multi-currency, Strong VAT features, Advanced reporting. Limitations: No free tier, More expensive.

Which should you choose?

Pick Xero if…

1,000+ integrations
50+ bank feeds
Scales well

Pick Sage Accounting if…

Multi-currency
Strong VAT features
Advanced reporting

Verdict

Xero vs Sage Accounting: Both are solid MTD-recognised options. Xero excels for sole traders & landlords who want a mature ecosystem and lots of integrations, while Sage Accounting is better for vat-registered businesses or those with complex accounting needs. Choose based on your specific needs and budget.

Still not sure which one fits?

Comparing prices and features only gets you so far. Answer five quick questions about how your business actually works and the MTD Software Finder will shortlist the tools that genuinely suit your situation — and be honest about what each one can't do.

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Xero vs Sage: how we researched this

We checked both Xero and Sage against the official HMRC list of MTD-compatible software on 30 September 2026, and verified pricing from each provider's own website on the same date. We judge what each tool genuinely can and can't do for a real UK sole trader, freelancer or landlord — including limitations a free trial won't volunteer — and we never let commission influence the order we present things. Some links on this page are affiliate links; we may earn a small commission if you buy through them, at no extra cost to you.

Also worth considering

If neither Xero nor Sage feels right, these HMRC-recognised options are worth a look:

FreeAgent UK sole traders & micro limited companies who want a simple all-in-one package Read the review →
QuickBooks Sole traders & small businesses already in the Intuit ecosystem Read the review →
Zoho Books Sole traders who want a free MTD-recognised option with full accounting features Read the review →

Bottom line: who should pick what

Your situation	Our pick	Why
Best for sole traders	Xero	Sole traders & landlords who want a mature ecosystem and lots of integrations

Not sure which camp you fall into? Run the 5-question Software Finder and we'll shortlist the tools that fit you.

Xero vs Sage: common questions

Which is better, Xero or Sage?

The honest answer is "it depends on your situation". Xero is aimed at traders who fit "Sole traders & landlords who want a mature ecosystem and lots of integrations", while Sage is aimed at people who fit "Established UK businesses & landlords who want a recognisable UK brand". If that doesn't settle it for you, run the 5-question MTD Software Finder and it will shortlist the tools that actually fit your circumstances.

Is Xero or Sage cheaper?

Xero starts from a lower headline price (From £7/month) than Sage (From £14/month). Check the plans on each provider's site for the full picture — the cheapest headline tier is often not the one you'll end up on.

Can I move from Xero to Sage later?

Yes. MTD just requires you to keep digital records and send quarterly updates to HMRC — it does not lock you into any one tool. Most MTD software lets you export your accounting data, so you can switch providers and simply start your next quarterly update in the new software. Keep your old records for at least six years.