Xero vs FreeAgent for UK Sole Traders

Pricing: FreeAgent Wins for Most Sole Traders

FreeAgent's killer advantage is the NatWest/RBS/Ulster Bank deal — completely free if you bank with any NatWest Group bank. That includes NatWest, Royal Bank of Scotland, and Ulster Bank. Given that NatWest is one of the UK's most popular business banks, this makes FreeAgent a no-brainer for a huge proportion of UK Sole Traders.

Without that bank deal, FreeAgent costs £19/mo (Sole Trader plan, ex-VAT) — still cheaper than Xero's £16/mo Starter plan when you factor in that Self Assessment is included at no extra cost in FreeAgent.

MTD & UK Compliance: Both Excellent

Both tools are HMRC-recognised and MTD-ready. Both support MTD for VAT and are prepared for MTD ITSA (Making Tax Digital for Income Tax). Both are used by UK accountants. Neither has a meaningful advantage here.

Self Assessment: FreeAgent Wins

FreeAgent includes Self Assessment filing built into the app — sole traders can prepare and submit their SA100 directly from FreeAgent without any add-on. Xero doesn't have built-in Self Assessment filing; you'll need to either use a third-party app, do it separately via HMRC's website, or have an accountant handle it.

Integrations & Ecosystem: Xero Wins

Xero has 800+ app integrations including Shopify, Stripe, Dext, HubSpot, and virtually every payroll, CRM, and e-commerce tool. If you use multiple business tools and want them to sync with your accounting, Xero's ecosystem is unmatched. FreeAgent has around 100 integrations — more than enough for most sole traders, but limited if you have complex needs.

Ease of Use: Both Good, Different Approaches

FreeAgent is designed specifically for non-accountants and UK Sole Traders. Its interface is more opinionated and guides you through the process. Xero is more powerful and flexible, which makes it slightly steeper to learn but ultimately more capable. For a sole trader who just wants to get on with work, FreeAgent's simplicity is a genuine advantage.

Verdict

For most UK sole traders and self-employed, FreeAgent is the better choice — especially if you bank with NatWest/RBS (making it free), need built-in Self Assessment, or want something built specifically for the UK sole trader market.

Choose Xero if you work with an accountant who uses it, need deep app integrations, manage multiple business entities, or anticipate growing beyond a simple sole trader structure.