Xero vs FreeAgent for a UK limited company: prices, limits and tax filing compared
Stack Founder HQ · Updated 18 October 2026 · Payments and accounting · How we write
Xero and FreeAgent are two of the most widely used accounting apps for small UK businesses. Both connect to your bank, both send Making Tax Digital (MTD) VAT returns to HMRC, and both are familiar to most UK accountants. They are priced and packaged quite differently, though. Xero has tiered plans with feature limits. FreeAgent has a single plan per business type and, for many people, a way to use it for free.
*Prices checked on 18 October 2026 on xero.com/uk/pricing-plans and freeagent.com/pricing. All prices exclude VAT. Both companies run introductory offers, noted below, which change often. This is not accounting or tax advice.*
Prices at a glance
| Plan | Regular price per month (excl. VAT) | Notes |
|---|---|---|
| Xero Ignite | £18 | 20 invoices and quotes, 10 bills |
| Xero Grow | £39 | Payroll for 1 person |
| Xero Comprehensive | £55 | Payroll for 5 people, 90-day forecast |
| Xero Ultimate | £70 | Payroll for 10 people, multiple currencies |
| FreeAgent (limited company) | £33, or £330 a year | One plan with everything included |
| FreeAgent via NatWest, RBS, Ulster Bank or Mettle | £0 | For eligible business bank customers |
Current offers: Xero was offering 90% off for the first six months, so Ignite was £1.80 a month for six months. Xero also offers a one-month free trial instead. FreeAgent was offering 50% off for the first six months (£16.50 a month) on monthly billing, or 50% off the first year on annual billing, after a 30-day free trial.
Xero's plans in more detail
Xero's pricing page lists these differences between plans:
- Ignite (£18): send quotes and 20 invoices, enter 10 bills, reconcile transactions, submit VAT returns, and a 30-day cash flow forecast. Payroll costs £1.50 per person as an extra, and online bill and payroll payments cost £0.20 each.
- Grow (£39): removes the invoice and bill limits, automates bill entry, includes payroll for one person, up to five domestic online payments, a 60-day forecast and customisable dashboards.
- Comprehensive (£55): payroll for five people, up to ten payments, a 90-day forecast and more.
- Ultimate (£70): payroll for ten people, expense claims for ten users, multiple currencies and a 180-day forecast.
On every plan, company accounts and Corporation Tax filing is an optional extra at £120 a year (excl. VAT, billed annually).
The Ignite limits are the thing to check. A business that sends more than 20 invoices a month, for example a SaaS company invoicing customers manually, will need Grow. If your sales come through Stripe or another payment processor and you post them as summary journals or bank deposits, Ignite may be enough.
FreeAgent's plan in more detail
FreeAgent has one plan for each business type. For limited companies it is £33 a month (or £330 a year). FreeAgent's pricing page lists, among other features:
- invoicing, expenses, bank feeds and cash flow forecasting
- time tracking and project profitability
- payroll, with PAYE and National Insurance filed directly to HMRC
- MTD-compatible VAT returns filed directly to HMRC
- Self Assessment returns filed directly to HMRC (useful for directors)
- end-of-year filing: final accounts and Corporation Tax
Optional add-ons include unlimited receipt and bill capture (£5 a month) and an Amazon UK Marketplace connection (£6 a month).
Free FreeAgent. FreeAgent is free if you have a business current account with NatWest, Royal Bank of Scotland or Ulster Bank, for as long as you keep the account, or a Mettle account with at least one transaction a month. Optional add-ons may still be charged. If you are opening a business bank account anyway, this can make FreeAgent the cheapest option by a wide margin.
Comparing the cost for a typical small company
Using regular prices, excluding VAT and introductory offers:
| Scenario | Xero | FreeAgent |
|---|---|---|
| One-director company, few invoices, no payroll, annual accounts done in the app | Ignite £18 + £10 (the £120 annual accounts add-on spread monthly) = £28 a month | £33 a month, or £0 with an eligible bank account |
| Director on payroll, 30+ invoices a month | Grow £39 + £10 = £49 a month | £33 a month, or £0 with an eligible bank account |
| Three employees on payroll | Comprehensive £55 + £10 = £65 a month | £33 a month, or £0 with an eligible bank account |
Many companies use an accountant to prepare and file the year-end accounts, in which case the £120 Xero add-on doesn't apply and the accountant's fee does.
Other differences
- Accountant preference. Many accountants have a preferred platform and may offer a discount through their partner programme. Ask yours before choosing.
- Integrations. If you want to connect stock, e-commerce, payment or reporting tools, check each app's integrations directory for the specific tools you use before choosing.
- Multi-currency. If you invoice in US dollars or euros, check the plan. On Xero, multiple currencies are listed on the Ultimate plan.
- Growth. Xero's tiers make it easy to start small and upgrade. FreeAgent's single price is simpler to budget for.
Which to choose
- FreeAgent is hard to beat if you bank with NatWest, RBS, Ulster Bank or Mettle, and for owner-managed companies that want payroll, VAT, Self Assessment and year-end filing in one fixed price.
- Xero is a good fit if your accountant uses it, you need its integrations or multi-currency features, or you want to start on Ignite and add features as you grow.