Xero vs QuickBooks for Sole Traders: Which is Better for MTD? (2025)
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Reviewed by SoleTraderGuide Editorial TeamMTD Software AnalystLast reviewed 1 March 2025
In a nutshell
Xero
- Clean, intuitive interface — great for beginners
- Best-in-class mobile app for on-the-go accounting
- 800+ integrations; excellent for growing businesses
QuickBooks
- Cheaper entry point with the Self-Employed plan (£8/month)
- More features at comparable price tiers
- Phone support available; better for those who like to call
Who Each Tool is Best For
Choose Xero if you...
- →Want the cleanest, most polished interface
- →Invoice clients regularly and need strong invoicing tools
- →Need lots of third-party integrations (CRM, payments, etc.)
- →Primarily work on mobile
Choose QuickBooks if you...
- →Have simple finances and want the cheapest MTD option (£8/month)
- →Want mileage tracking and receipt capture built in
- →Prefer to call support when you have an issue
- →Need a tax liability estimate visible at all times
Full Feature Comparison
| Feature |  |  |
|---|---|---|
| MTD compatible HMRC-recognised for MTD Income Tax | ||
| Starting price | £16/month | £8/month |
| Free plan available | ||
| Free trial | 30 days | 30 days |
| Supports sole traders | ||
| Supports landlords | ||
| Mobile app quality | Excellent | Good |
| Ease of use (1–5) | 4 / 5 | 3.5 / 5 |
| UK customer support | Chat + email | Chat + phone |
| Integrations | 800+ apps | 650+ apps |
| Self-assessment filing | Via accountant | Via accountant |
Pros and Cons
Xero
What we like
- HMRC-recognised MTD software
- Strong mobile app
- Extensive integrations (800+ apps)
- Automatic bank feeds
- Good UK support
Watch out for
- No free plan
- Can feel complex for very small businesses
- Pricing increases with features
QuickBooks
What we like
- HMRC-recognised
- Feature-rich platform
- Good reporting and dashboards
- Strong accountant ecosystem
- Self-employed plan available
Watch out for
- No free plan
- Can be pricey at higher tiers
- Interface can feel busy
Key Differences Explained
Pricing
At the entry level, QuickBooks wins on price. The Self-Employed plan at £8/month is the cheapest HMRC-recognised MTD option among the major platforms. Xero's Starter plan begins at £16/month. However, once you step up to full bookkeeping plans — where invoicing and bank reconciliation are included — the gap narrows. QuickBooks Simple Start is £14/month versus Xero Starter at £16/month. Both offer 30-day free trials.
Interface and Ease of Use
Xero has long been praised for its clean, logical interface. For sole traders who are new to accounting software, Xero's layout is less overwhelming. QuickBooks packs more features into its screens, which makes it feel busier — some users love this, others find it distracting. This is worth testing yourself during a free trial; interface preference is personal.
Mobile Apps
Xero's mobile app is consistently rated more highly by users and in app store reviews. It allows full invoicing, bank reconciliation, and expense capture on the go. QuickBooks' mobile app is functional but less polished. If you do a significant amount of your work on a phone, Xero has the edge here.
MTD and Self-Assessment
Both platforms are HMRC-recognised for MTD Income Tax and handle quarterly updates and EOPS submissions. Neither files a traditional Self Assessment return directly — for this, users typically work with an accountant or consider FreeAgent, which includes self-assessment filing in its plans.
The Verdict
For most established sole traders: Xero edges ahead on interface quality, mobile experience, and integrations. If you regularly invoice clients and want software that feels professional, Xero is the better choice.
For sole traders with simple finances: QuickBooks Self-Employed at £8/month is hard to argue with. It covers MTD, mileage, and basic expenses at a price that's almost half of Xero's entry-level plan.
If budget is the primary concern: Start with QuickBooks Self-Employed and upgrade if you outgrow it. If you eventually need proper invoicing and bank reconciliation, you can move to QuickBooks Simple Start or switch to Xero at that point.
Alternative Options
Neither Xero nor QuickBooks the right fit? Here are two other strong options:
Frequently Asked Questions
Ready to choose your MTD software?
Both Xero and QuickBooks offer 30-day free trials. Test both and decide for yourself — no commitment required.