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Updated on 6 September 2026

Top pick

Xero review (2026): mature MTD Income Tax software with the largest UK app ecosystem

Prices and features last verified on 20 September 2026. Sources: Xero website, HMRC MTD software list.

Xero is HMRC-recognised for MTD Income Tax and starts at £7/month for sole traders. It offers the UK’s largest app ecosystem with 1,000+ integrations, strong bank feeds, and multi-currency support. Rated 4.3/5 for sole traders, landlords, and small businesses who need flexibility.

Founded in 2006 and listed on the New Zealand Stock Exchange (NZX), Xero now serves over 4.4 million subscribers in more than 180 countries. That scale funds the platform’s biggest advantage: a marketplace of over 1,000 apps covering point-of-sale, payroll, time tracking, e-commerce, and expense management.

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Who is Xero best for?

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

Pricing

From £7/month (Xero Simple) — £33/month (Grow). Xero Simple (sole trader entry) is enough for a single sole trader; landlords with multiple properties usually pick Xero Ignite (£16/month) or Grow (£33/month) for tracking categories.

MTD Income Tax status

HMRC-recognised for MTD ITSA.

Pros & cons

Pros

  • HMRC-recognised for MTD Income Tax since the pilot phase — the most mature MTD ITSA track record
  • Largest UK app marketplace (1,000+ add-ons) — point-of-sale, payroll, time tracking, e-commerce, expense management
  • Strong, reliable bank feeds

Cons

  • Entry Xero Simple (£7/month) is fairly limited on features; landlords usually need Ignite (£16/month) or Grow (£33/month)
  • Per-company pricing — costs add up if you run multiple entities
  • UK phone support is reserved for the higher tiers

Verdict

Pick Xero if your top priority is flexibility, the broadest integration library, and reliable bank feeds. If you only need a simple, opinionated package, FreeAgent is often cheaper and easier.

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Frequently asked questions

Is Xero HMRC-recognised for MTD Income Tax?

Yes. Xero is fully HMRC-recognised for MTD ITSA and can submit quarterly updates and your End of Period Statement directly to HMRC.

Does Xero offer a free trial?

Yes — Xero offers a 30-day free trial with no card required. There’s no permanent free plan though; the entry tier is Xero Simple at £7/month.

Can I use Xero on my phone?

Yes. Xero has solid iOS and Android apps, and its reliable bank feeds mean most transactions reconcile automatically.

What happens if I want to switch later?

You can export your data and switch to another HMRC-recognised provider at any time. Your submission history with HMRC stays intact.