FreeAgent vs Xero Comparison 2026
FreeAgent is UK-only accounting that submits VAT and self assessment straight to HMRC, at £33 a month or free if you bank with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle. Xero is general accounting with contractor 1099 handling and cash flow forecasting, starting at $25 a month for 20 invoices and 5 bills before the cap forces an upgrade. The choice is jurisdiction first: one files a UK return itself, the other is built around a wider market with an invoice cap a busy freelancer clears fast.
At a glance
- Xero starts cheaper, at $25.
- Neither has a free tier.
Side by side
FreeAgent | Xero | |
|---|---|---|
| Starting price (they differ) | From $33 | From $25 |
| Pricing model (they differ) | Free trial, then paid | Paid subscription |
| Free tier | No | No |
| Billing | Monthly or annual | Monthly or annual |
| Free trial | 30 days | Not stated |
| API | Yes |
FreeAgent
Accounting built around UK sole traders
FreeAgent covers invoices, expenses, VAT returns and the self assessment filing a UK sole trader has to do anyway, and it files them with HMRC directly. Bank feeds and receipt capture keep the bookkeeping from piling up into an annual weekend of dread. It is UK-only, so it is no use to anybody filing anywhere else.
Our note
The bank-account route is worth checking before paying. If you already bank with NatWest or hold a Mettle account, this is a full accounting package for nothing, and it is the only offer of that shape in the category.
Xero
Accounting a freelancer can run without help
Xero covers the parts of bookkeeping a creator actually meets: invoices, bank reconciliation, expenses and the reports an accountant asks for in January. Nothing in it assumes you have taken an accounting class. There is no free plan, and the cheapest tier stops at twenty invoices a month, which a busy freelancer clears by the third week.
Our note
Pick Xero over Wave when you have contractors to pay and a real filing to make, and Wave over Xero when you mostly need invoices to look professional. The invoice cap on the entry plan is the thing people hit and get annoyed by, so count last year's invoices before choosing it.
Why people weigh these two
- Xero instead of FreeAgent
- Xero is the most direct swap, accounting a freelancer can run without help, at $25 a month against FreeAgent's $33.
- FreeAgent instead of Xero
- FreeAgent is built specifically around UK sole traders, at $33 with no free tier, worth it if the accounting rules that matter are the UK's own.
Which one should you pick
Pick FreeAgent if you are a UK sole trader or limited company and want the self assessment and Making Tax Digital VAT return filed straight to HMRC from the same app that does the bookkeeping. £33 a month is the list price, but it drops to free for the life of the account if you bank with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle.
Pick Xero if you pay contractors and need the 1099 paperwork, or want cash flow forecast 30 to 180 days out. Early is $25 a month but caps at 20 invoices and 5 bills, a limit most busy freelancers hit by the third week, so budget for Growing at $55 once that happens. There is no free tier at all, only a promotional first six months.
Common questions
- Does Xero file taxes the way FreeAgent files with HMRC?
- Not in the same way. Xero produces the profit and loss, balance sheet and trial balance an accountant needs and handles 1099 contractor forms, but the listing does not describe it submitting a return directly to a tax authority. FreeAgent's whole product is built around filing self assessment and VAT with HMRC itself.
- What is the invoice cap on Xero's cheapest plan?
- Early, at $25 a month, is capped at 20 invoices and 5 bills a month. FreeAgent carries no equivalent invoice cap, though it charges £33 a month unless a qualifying bank account makes it free.
- Can FreeAgent's free tier be had without switching banks?
- No. It is not a plan you sign up for, it comes from holding a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle account. Everyone else pays £33 a month or £330 a year excluding VAT, with a 30-day trial and half price for the first six months or year.
- Is either tool useful outside its home market?
- FreeAgent is no use outside the UK, since HMRC filing is the product. Xero is not described as UK-specific in the listing and includes US-style 1099 contractor handling, making it the more portable choice of the two.
Ratings are the average of reviews readers left. The facts are stated by each tool’s own listing and are not verified by CloutStack. How we make money.