Author
Mark C
- 1st January 2026
The Best Accounting Software for Sole Traders – 2026 Guide
For sole traders and small business owners, keeping on top of finances can be one of the biggest challenges. Choosing the best accounting software for sole traders can save hours of admin, reduce mistakes, and keep your tax submissions fully compliant — all while giving you clear visibility of your cash flow. But with so many providers claiming to be the best, how do you know which option is right for you?
In this guide, we explore the leading accounting and bookkeeping software for sole traders in the UK. You’ll discover affordable solutions, learn which providers offer cheap accounting software for sole traders, and find out if free accounting software for sole traders can actually meet your needs. We’ll also highlight key features to look out for so you can confidently answer the question: “Which is the best accounting software for my business?”
Whether you’re self-employed, freelancing, or scaling your business, this guide will help you identify tools that make managing money easier, faster, and more cost-effective.
See Our Best Accounting Software Deals for Sole Traders Below
QuickBooks
Accounting Software- Smart invoicing & expense tracking
- VAT & tax return tools
- Payroll & reporting options
- Connects with banks & apps
Xero
Accounting Software- Easy cloud-based bookkeeping
- Send invoices & track payments
- Bank reconciliation made simple
- Payroll & project tracking add-ons
Sage
Accounting Software- Trusted UK accounting software
- Tax & VAT submissions to HMRC
- Invoicing & cashflow tracking
- Multi-user and accountant access
Key Benefits of Using Accounting Software for Sole Traders
The best accounting software for sole traders goes far beyond spreadsheets and manual bookkeeping. With features that automate tax compliance, track income and expenses, and deliver real-time insights, these tools help sole traders and SMEs save time, cut errors, and make smarter financial decisions.
Simplified Bookkeeping
The best bookkeeping software for sole traders lets you automatically track income and expenses, saving valuable time and reducing mistakes. No more manual data entry — everything is logged and organised for you.
Better Financial Insights
Stay in control of your finances with dashboards and reports that give a real-time view of your business performance. Perfect for freelancers, sole traders, and SMEs managing day-to-day cash flow.
HMRC & VAT Compliance
Most leading solutions are MTD-ready, making tax submissions easier than ever. The best accounting software for sole traders ensures you stay compliant with HMRC rules and avoid costly penalties.
Save Time with Automation
From invoicing to bank reconciliation, modern accounting and bookkeeping software automates repetitive tasks — giving sole traders more time to focus on running and growing their businesses.
Scalability & Flexibility
Whether you’re working alone or planning to expand, the right accounting software adapts to your needs with features like payroll, expense management, and multi-user access.
Best Accounting Software for Sole Traders
We’ve reviewed the best accounting software for sole traders available in the UK, helping you find the right fit. Whether you’re a freelancer, contractor, or running a growing SME, the right solution will simplify bookkeeping, invoicing, and tax compliance.
From cheap accounting software for sole traders to advanced cloud-based platforms, this guide highlights trusted providers so you can confidently choose the one that makes managing your business easier.
From cloud-based solutions to feature-rich platforms, this guide compares top accounting software providers so you can confidently decide which one works best for your business.
Xero Accounting Software for Sole Traders
Best for: Sole traders who want easy-to-use, cloud-based accounting software that simplifies invoicing, expenses, and tax compliance.
Current Offer: Get 90% off for 6 months — with prices starting from just £1.60/month (T&Cs apply).
Pricing: Plans start from £16 per month (before discount)
Key Features of Xero for Sole Traders
Create and send professional invoices to clients and track payments with ease
Connect your bank account for real-time reconciliation of income and expenses
Submit VAT returns directly to HMRC, fully compliant with Making Tax Digital
Manage bills and expenses in one place to stay on top of cash flow
Access add-ons for payroll or projects if your sole trader business grows
Share access with your accountant to simplify end-of-year accounts and tax returns
Ideal For
Sole traders who want simple and affordable accounting software
Freelancers who need invoicing, expense tracking, and cash flow insights in one tool
Self-employed individuals looking for software that’s MTD-compliant and HMRC recognised
Why Sole Traders Should Choose Xero
Xero is one of the best accounting software choices for sole traders because it balances affordability with powerful features. The entry-level plan is perfect for those just starting out, offering everything needed to handle bookkeeping, invoicing, and expenses without unnecessary complexity.
As a sole trader, Xero helps you stay organised, cut down on paperwork, and avoid mistakes. You can reconcile transactions automatically, generate accurate financial reports, and file VAT returns directly with HMRC — all from the cloud. This makes managing your finances easier and saves valuable time that can be spent growing your business.
Exclusive Xero Offer:
Click here, sign up today and get 90% off your first 6 months across all Xero plans.
Read our full Xero Accounting Software Review >> here for more details!
QuickBooks Accounting Software for Sole Traders
Best for: Sole traders who want smart, automated accounting software with excellent tools for invoicing, expenses, and tax compliance.
Current Offer: Get 90% off for 7 months across all QuickBooks plans (T&Cs apply).
Pricing: Plans start from £14 per month (before discount).
Key Features of QuickBooks for Sole Traders
Create and send professional invoices while tracking payments automatically Connect your bank account for automatic reconciliation and real-time cash flow forecasting Submit VAT and self-assessment tax returns directly to HMRC with MTD compliance Track mileage via the mobile app for accurate expense claims Add-ons available for payroll or projects if your sole trader business expands Connect with hundreds of apps to streamline workflows and reduce admin
Ideal For
Sole traders who need straightforward invoicing and tax compliance
Freelancers who want built-in mileage tracking and expense tools
Self-employed individuals looking for software that’s easy to scale as their business grows
Why Sole Traders Should Choose QuickBooks
QuickBooks is one of the most popular accounting software solutions for sole traders in the UK, trusted by millions of small business owners worldwide. Its main strength lies in automation — from automatic bank feeds to cash flow forecasting, QuickBooks removes admin headaches and helps you stay tax-compliant.
If you’re a sole trader, QuickBooks gives you everything you need to stay organised, reduce time spent on bookkeeping, and manage your business finances from anywhere. With its intuitive app, you can send invoices on the go, track expenses in real time, and confidently prepare for tax deadlines — all in one affordable package.
Exclusive QuickBooks Offer:
Sign up today and get 90% off your first 7 months on all QuickBooks plans.
Read our full QuickBooks Accounting Software Review >> here for more details!
Sage Accounting Software for Sole Traders
Best for: Sole traders and freelancers who want trusted UK accounting software with strong invoicing, expense tracking, and VAT compliance tools.
Current Offer: Get 3 months free on Sage Accounting (T&Cs apply).
Pricing: Plans start from £14 per month (before discount).
Key Features of Sage for Sole Traders
Simple invoicing and payment tracking to stay on top of cash flow Bank reconciliation with clear cash flow insights HMRC-recognised VAT submissions with full MTD compliance Expense tracking with receipt uploads to keep records organised Optional payroll tools if your sole trader business grows to include staff Accountant access for easier collaboration at year-end
Ideal For
Sole traders who need reliable invoicing and VAT support
Freelancers looking for easy expense management
Self-employed individuals who want long-term affordability with room to grow
Why Sole Traders Should Choose Sage
Sage is one of the most established names in accounting software, trusted by thousands of UK sole traders. Known for its reliability and HMRC compliance, it’s a strong choice if you want confidence that your accounts and tax submissions are handled correctly.
For sole traders, Sage offers all the essentials: invoicing, expenses, VAT, and bank reconciliation — without unnecessary complexity. You can automate routine tasks, streamline your bookkeeping, and reduce admin, while still having access to professional-level features when needed.
With Sage, you get peace of mind, knowing your finances are accurate and tax-ready throughout the year.
Exclusive Sage Offer:
Sign up today and get 3 months free on Sage Accounting.
Read our full Sage Accounting Software Review >> here for more details!
ANNA Money + Taxes Accounting Software for Sole Traders
Best for: Sole traders and freelancers who want simple accounting software combined with automatic tax calculations for Self Assessment and VAT.
Current Offer: Get a 30-day free trial of ANNA Money + Taxes.
Pricing: Plans start from £14.90 per month (before discount).
Key Features of ANNA Money + Taxes for Sole Traders
Automated tax calculations for VAT and Self Assessment Smart invoicing and expense tracking to stay organised Real-time bank feeds with automatic reconciliation 24/7 in-app support with instant notifications Multi-user access if you work with an accountant Direct HMRC integration for Making Tax Digital compliance
Ideal For
Sole traders who need support managing Self Assessment tax returns
Freelancers looking for an easy way to track invoices and expenses
Self-employed individuals who want tax and bookkeeping tools in one package
Why Sole Traders Should Choose ANNA Money + Taxes
ANNA Money + Taxes is designed with sole traders in mind, helping you stay tax-ready without the stress. It automatically calculates your VAT and Self Assessment liabilities, meaning fewer surprises when deadlines approach.
The software also offers smart invoicing, receipt capture, expense tracking, and real-time bank reconciliation, so you always know where you stand financially. With direct HMRC integration and 24/7 in-app support, ANNA is an excellent choice for sole traders who want straightforward financial management without the complexity of traditional systems.
Exclusive ANNA Money + Taxes Offer:
Sign up today and get a 30-day free trial to test all features of ANNA Money + Taxes.
Why Should Sole Traders Use Accounting Software?
Managing finances manually with spreadsheets or paper records can be stressful and time-consuming for sole traders. The best accounting software for sole traders makes everything easier by automating tasks, improving accuracy, and keeping you tax compliant.
Here’s why it’s worth considering accounting software if you’re self-employed:
✔️ Save time – Automate invoicing, expense tracking, and bank reconciliation so you can focus on your work, not admin.
✔️ Improve accuracy – Reduce mistakes with real-time data pulled directly from your bank and built-in error checks.
✔️ Stay compliant – Most platforms are HMRC-recognised and Making Tax Digital (MTD) ready, so VAT and Self Assessment submissions are simpler.
✔️ Gain insights – Access dashboards and reports to get a clear picture of your cash flow, profits, and business performance.
✔️ Scale easily – Whether you need payroll, mileage tracking, or extra features, the best bookkeeping software for sole traders grows with you.
If you’re a sole trader or freelancer, using accounting software means you can manage your money with confidence, cut down on paperwork, and stay on top of deadlines without stress.
What is Accounting Software?
Accounting software is a digital tool that helps sole traders manage finances in one place — from recording income and expenses to generating invoices, reconciling bank transactions, and submitting taxes.
Unlike manual bookkeeping or spreadsheets, the best accounting software for sole traders automates key tasks, saving hours of admin and giving you a clearer view of your cash flow. These tools also integrate with your bank, generate real-time reports, and ensure you stay compliant with HMRC’s Making Tax Digital (MTD) rules.
For sole traders, this means less stress at tax time and more time to focus on growing your business. Whether you’re searching for cheap accounting software for sole traders to keep costs down or wondering if free accounting software for sole traders can meet your needs, the right choice depends on your business size, goals, and the features you value most.
Put simply, accounting software helps sole traders reduce errors, stay compliant, and gain insights that make financial management simpler and more professional.
How Does Accounting Software Work for Sole Traders?
Accounting software helps sole traders manage their finances more efficiently by automating everyday tasks like invoicing, expense tracking, and submitting taxes. Instead of relying on manual spreadsheets, modern software connects directly to your bank account, giving you real-time insights into your cash flow.
Sole traders typically use accounting software for:
✔️ Creating and sending invoices to clients and getting paid faster
✔️ Recording income and expenses, including mileage, receipts, and bills
✔️ Reconciling transactions with your bank to keep accounts accurate
✔️ Submitting Self Assessment and VAT returns while staying compliant with Making Tax Digital
✔️ Generating reports to understand profits, forecast cash flow, and make better business decisions
Many of the best accounting software for sole traders also include integrations for payroll, project tracking, and expense management, making them an all-in-one financial hub. Whether you’re looking for cheap accounting software for sole traders or exploring free accounting software for sole traders, the right option can save time, reduce errors, and give you peace of mind at tax time.
Who is Accounting Software For?
Accounting software isn’t just for big companies — it’s built for sole traders, freelancers, and self-employed workers who want to stay organised and avoid tax headaches. By replacing manual bookkeeping with automation, it makes managing invoices, expenses, and tax submissions much easier.
Accounting software is especially useful for:
✔️ Sole traders and freelancers who need help with invoicing, expense tracking, and Self Assessment tax returns
✔️ Contractors and gig workers who want affordable accounting tools that scale with their business
✔️ Self-employed individuals exploring the best bookkeeping software for sole traders to reduce admin and improve accuracy
Whether you need a simple invoicing app, cheap accounting software for sole traders, or a feature-rich platform that covers everything from VAT to mileage tracking, the right choice will depend on the type of business you run and the features you need most.
Do I Need Accounting Software as a Sole Trader?
If you’re self-employed in the UK, whether working as a sole trader or freelancer, you’ll almost certainly benefit from using accounting software. While it isn’t a strict legal requirement for everyone, digital record-keeping is becoming more important with HMRC’s Making Tax Digital (MTD) rules.
You may need accounting software if:
You want to simplify bookkeeping and cut down on manual data entry You issue invoices regularly and need an easy way to track who has paid You’re VAT-registered and must submit returns using MTD-compliant software You want real-time visibility of your cash flow, income, and expenses You’d like to save time by automating expense tracking, reconciliation, and tax submissions
Even if you’re just starting out, using the best accounting software for sole traders helps you build good financial habits, avoid mistakes, and stay compliant. For many sole traders, it’s also the easiest way to prepare for Self Assessment and reduce stress around tax deadlines.
How to Choose the Best Accounting Software for Sole Traders
Choosing the best accounting software for sole traders depends on your needs, budget, and how simple you want it to be.
Key things to look for:
Ease of use – Software that’s quick to set up and simple to navigate Features – Sole traders usually need invoicing, expense tracking, and tax tools Scalability – Option to add payroll or reporting if your business grows Compliance – HMRC-recognised and Making Tax Digital (MTD) ready Integrations – Connects to your bank and other tools you use Cost – Check monthly pricing, discounts, and free trials
By focusing on these points, you’ll find the best bookkeeping software for sole traders that saves time and keeps your finances organised.
Benefits of Accounting Software for Sole Traders
For sole traders, accounting software takes the stress out of managing money. Instead of spreadsheets and paperwork, the best accounting software for sole traders automates tasks, reduces errors, and gives a clear view of business performance.
Key Benefits
✔️ Save time – Automate invoicing, expense tracking, and bank reconciliation
✔️ Improve accuracy – Reduce mistakes with real-time data from your bank
✔️ Get insights – Dashboards show cash flow, profit, and expenses instantly
✔️ Stay compliant – Submit VAT and Self Assessment with MTD-ready tools
✔️ Grow with ease – From free accounting software for sole traders to paid plans with payroll and reporting
By using accounting software, sole traders can stay organised, cut costs, and run their business with more confidence.
Pros and Cons of Accounting Software for Sole Traders
Like any tool, accounting software has advantages and drawbacks. For sole traders, the right system can save time and simplify tax, but it’s worth weighing up both sides.
Pro’s:
✔️ Time savings – Automates invoicing, expense tracking, and reconciliation, freeing up more time to focus on your work
✔️ Improved accuracy – Reduces manual errors by pulling in real-time data from your bank and receipts
✔️ Compliance support – HMRC-recognised and Making Tax Digital (MTD) ready, making VAT and Self Assessment easier
✔️ Scalability – From free accounting software for sole traders to advanced plans, you can choose tools that grow with your needs
✔️ Better insights – Dashboards and reports give a clear view of cash flow, profit, and expenses
Cons:
❌ Subscription costs – Most reliable platforms charge monthly fees, although some free accounting software options exist
❌ Learning curve – Getting used to new software can take time if you’re not familiar with accounting tools
❌ Too many features – Some systems include extras that sole traders may never use, which can feel overwhelming
❌ Internet reliance – As most accounting software is cloud-based, a stable internet connection is essential
What Are the Different Types of Accounting Software?
Not all accounting software is the same. Sole traders can choose from different types depending on how they prefer to work and what features they need.
Cloud-based accounting software – The most popular choice for sole traders. Access accounts from any device, automate updates, and link directly with your bank.
Desktop accounting software – Installed on your computer, offering strong features but less flexibility compared to cloud tools.
Free accounting software – Covers essentials like invoicing and expenses. A good option for sole traders starting out, but may lack advanced features.
Specialist accounting software – Tailored to industries such as construction, retail, or legal services, with features designed for specific needs.
By understanding these options, sole traders can pick the best accounting software for their situation, balancing cost, usability, and scalability.
Steps to Get Started with the best Accounting Software for sole traders
Getting started with accounting software is simple. Follow these steps to find the right option for your business:
Research providers – Compare features, pricing, and reviews to identify the best accounting software for sole traders.
Choose a plan – Select a subscription that fits your needs, from free accounting software for sole traders to paid plans with extras like payroll.
Set up your account – Connect your bank, customise invoices, and add your business details.
Automate tasks – Enable expense tracking, bank reconciliation, and reminders to save time.
Stay compliant – Use MTD-ready software to manage VAT or Self Assessment tax returns directly with HMRC.
By following these steps, sole traders can quickly get set up with accounting software that saves time, reduces errors, and keeps finances under control.
At a glance - Best Accounting Software for Sole Traders Comparison:
Alternative Options to Accounting Software for Sole Traders
Not every sole trader chooses full accounting software straight away. There are alternatives that can help with basic financial management, though they often lack the automation, compliance, and reporting offered by dedicated platforms.
Spreadsheets – Tools like Excel or Google Sheets are free and flexible for simple bookkeeping. However, they require manual updates, are prone to errors, and don’t integrate with HMRC.
Bookkeeping apps – Mobile apps can track expenses and generate invoices but usually miss advanced features like VAT submissions, Self Assessment support, or payroll.
Outsourced bookkeeping – Hiring a bookkeeper or accountant reduces admin work but comes at a higher cost and gives you less day-to-day visibility of cash flow.
These options may work for very small businesses, but as your operations grow, switching to the best accounting software for sole traders is usually the smarter, more compliant, and cost-effective choice.
FAQs – Best Accounting Software for Sole Traders
Do I need accounting software as a sole trader?
Yes, while it’s not legally required, using the best accounting software for sole traders makes managing invoices, expenses, and tax returns much easier and ensures you stay compliant with HMRC’s Making Tax Digital rules.
What is the best accounting software for sole traders in the UK?
The best accounting software for sole traders in the UK includes popular options like Xero, QuickBooks, Sage, FreeAgent, and ANNA Money + Taxes, each offering invoicing, expense tracking, and MTD compliance.
Can I use free accounting software for sole traders?
Yes, some providers offer free accounting software for sole traders, but these usually have limited features. Paid plans often include VAT submissions, advanced reporting, and accountant access.
What is the cheapest accounting software for sole traders?
Cheap accounting software for sole traders starts at just a few pounds per month, with discounts often available. QuickBooks and Sage frequently run offers for new customers.
What is the difference between bookkeeping and accounting software for sole traders?
The best bookkeeping software for sole traders tracks income, expenses, and receipts, while full accounting software also helps with VAT, tax returns, and reporting.
Can accounting software help with Self Assessment tax returns?
Yes, the best accounting software for sole traders includes tools that calculate income, expenses, and tax liabilities, making Self Assessment submissions much easier.
Is cloud-based accounting software good for sole traders?
Cloud-based accounting software for sole traders is ideal because it lets you access accounts anywhere, sync bank transactions automatically, and stay compliant with HMRC.
What features should I look for in the best accounting software for sole traders?
Key features of the best accounting software for sole traders include invoicing, expense tracking, VAT submissions, bank reconciliation, and HMRC-recognised MTD compliance.
Can free accounting software for sole traders handle VAT?
Most free accounting software for sole traders only covers basic bookkeeping, so VAT submissions usually require upgrading to a paid plan.
How does cheap accounting software for sole traders compare to premium plans?
Cheap accounting software for sole traders covers the basics like invoicing and expenses, while premium plans add advanced reporting, payroll, and multi-user access.
Which is better: spreadsheets or accounting software for sole traders?
Spreadsheets can work for very small businesses, but the best accounting software for sole traders reduces errors, automates tasks, and integrates with HMRC for compliance.
Can the best bookkeeping software for sole traders integrate with my bank?
Yes, the best bookkeeping software for sole traders connects to your bank account for real-time reconciliation, reducing manual data entry.
Do I need cheap accounting software for sole traders if I already use an accountant?
Yes, even if you use an accountant, cheap accounting software for sole traders helps you stay organised, reduces admin, and gives your accountant accurate data.
How quickly can I set up the best accounting software for sole traders?
Most of the best accounting software for sole traders can be set up within minutes by connecting your bank and importing past transactions.
What’s the advantage of using free accounting software for sole traders when starting out?
Free accounting software for sole traders is a good starting point for managing income and expenses, but as your business grows, you may need to upgrade for VAT and tax compliance.
Conclusion – Finding the Best Accounting Software for Sole Traders
Managing finances as a sole trader doesn’t have to be complicated. The best accounting software for sole traders takes care of invoicing, expenses, and tax compliance, giving you more time to focus on running your business. Whether you’re just starting out and exploring free accounting software for sole traders, or you’re ready to invest in cheap accounting software for sole traders with advanced features, there’s a solution to match your needs.
The right choice will depend on what matters most to you: affordability, ease of use, HMRC compliance, or scalability as your business grows. From simple bookkeeping software for sole traders to feature-packed accounting platforms, switching to digital tools will save time, reduce errors, and give you peace of mind at tax time.
👉 Ready to get started? Explore our recommended providers and find the best accounting software for sole traders today — with exclusive offers to help you save money while staying tax-compliant.
Start Your Business Journey Today with the Best Accounting Software for Sole Traders
Choosing the best accounting software for sole traders is one of the smartest steps you can take to simplify bookkeeping, save time, and stay tax-compliant. Explore our recommended providers, compare exclusive deals, and get started today with software that fits your business needs.
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