Xero vs QuickBooks in the UK (2026), and the Third Option
What each one costs now that Xero's September rise has landed, what every plan actually limits, where each genuinely wins, and where IQ Books by ReconcileIQ fits in.
The choice most UK businesses make by default
Ask a room of UK sole traders and small company directors which accounting software they use and most of the hands go up for one of two names. Xero and QuickBooks have split the UK small business market between them for a decade, and the question "which one?" usually gets settled by whatever the accountant already uses.
That is a reasonable way to choose, but it hides how much the two have drifted apart on price and on what each tier unlocks. Xero raised its UK prices again on 1 September 2026. QuickBooks repriced in January. Both now sell five plans with different limits, and the plan you actually need is often two rungs above the one on the advert.
Quick answer
Xero and QuickBooks are closer than their marketing suggests. Xero suits UK businesses that want payroll in the plan and a very wide app ecosystem; QuickBooks suits sole traders and businesses that want inventory and a cheap VAT-capable entry plan. After Xero's 1 September 2026 rise its UK plans cost £7 to £70 a month (£18 upwards once you are VAT registered), while QuickBooks runs £10 to £123 (both excluding VAT). IQ Books by ReconcileIQ is a third option: one organisation with the whole ledger, plus MTD VAT and Income Tax quarterly filing, on a free plan.
- Xero UK is £7 a month on Simple (not VAT registered), then £18, £39, £55 or £70 from 1 September 2026, and its two cheapest plans cap invoices.
- QuickBooks UK is £10 to £123 a month; VAT returns need Simple Start (£16) and inventory and projects need Plus (£56).
- IQ Books gives one organisation the full ledger and MTD filing free, with paid plans from £5 a month.
Below are the real numbers, plan by plan, then the honest case for each, including the places where IQ Books does not yet compete. If you want the three-way version with Sage, that lives in our Xero vs QuickBooks vs Sage comparison.
Xero pricing in the UK now
Xero's new prices apply to new and existing UK subscribers alike from 1 September 2026; being an existing customer does not hold your old rate. These are the list prices on Xero's UK pricing page, excluding VAT, after any introductory discount ends.
| Xero plan | Per month | Per year | What it includes, and where it stops |
|---|---|---|---|
| Simple | £7 | £84 | For businesses that are not VAT registered: up to 10 invoices and quotes a month, built for sole traders and landlords under MTD for Income Tax |
| Ignite | £18 | £216 | VAT returns, but 20 invoices and 10 bills a month; payroll at £1.50 a person |
| Grow | £39 | £468 | Unlimited invoices, payroll for 1 person, 1 expenses user |
| Comprehensive | £55 | £660 | Multi-currency, payroll for 5 people, 5 expenses users |
| Ultimate | £70 | £840 | Payroll for 10 people, 10 expenses and projects users, KPI analysis |
Sources: Xero UK pricing, Xero price update, Introducing Xero Simple, 1office. Retrieved 5 October 2026.
Two things matter more than the headline. First, Ignite is the cheapest Xero plan that files VAT returns, but 20 invoices and 10 bills a month is a ceiling most trading businesses hit within a year, which makes Grow at £39 the realistic starting point. Second, Xero is modular: CIS returns are £5 a month extra on every plan, each extra expenses or projects user is £2.50, and Xero's own company accounts and tax add-on is £120 a year. The September rise was the second in two autumns; we tracked the previous one in Xero and QuickBooks price increases: the 2026 numbers.
QuickBooks pricing in the UK now
Intuit's UK pricing page loads its figures live in the browser, so the numbers below come from two independent UK reviews that checked the page in March and August 2026 and agree on every figure. All exclude VAT. Check the live page before you buy, because Intuit discounts heavily for new customers.
| QuickBooks plan | Per month | Per year | What it includes, and where it stops |
|---|---|---|---|
| Sole Trader Plus | £10 | £120 | 1 user, MTD for Income Tax, mileage, invoicing; no VAT returns |
| Simple Start | £16 | £192 | 1 user, adds VAT returns to HMRC |
| Essentials | £38 | £456 | 3 users, bill management, recurring invoices, multi-currency |
| Plus | £56 | £672 | 5 users, projects, inventory, budgeting |
| Advanced | £123 | £1,476 | 25 users, forecasting, revenue recognition, custom reports |
Sources: Startups.co.uk, Marc Andrews, QuickBooks UK pricing. Retrieved 5 October 2026.
Payroll is a separate add-on: Core is £5 a month plus £1.30 per employee paid, Premium £10 plus £2, and Elite £15 plus £3. The introductory offer has been 90% off for up to twelve months, but it cannot be combined with the 30-day free trial, so you choose between trying it and the discount. The tier jump that catches people out is inventory and projects, which only arrive on Plus at £56.
Xero vs QuickBooks vs IQ Books, side by side
This is the comparison at the level a small business actually feels it: the cheapest plan that does each job. IQ Books is the column on the right.
| The job | Xero | QuickBooks | IQ Books |
|---|---|---|---|
| Cheapest plan | Simple, £7 (not VAT registered) | Sole Trader Plus, £10 | Free, £0 |
| Cheapest plan that files VAT returns | Ignite, £18 (20 invoices, 10 bills a month) | Simple Start, £16 (1 user) | Free plan |
| MTD for Income Tax | Simple and above | Sole Trader Plus and above | Quarterly updates on every plan, free |
| Multi-currency | Comprehensive, £55 | Essentials, £38 | Free plan |
| Projects | Ultimate, £70 (10 users included) | Plus, £56 | Free plan |
| Stock and inventory | Basic tracked items | Plus, £56 | Free plan (moving-average cost) |
| Payroll | Included: 1, 5 or 10 people by plan | Add-on from £5 + £1.30 per employee | Not included (posts your payroll journal) |
| Bank feeds | Yes | Yes | Yes, open banking, plus CSV and PDF import |
| Coding bank lines for you | JAX assistant, high-confidence matches | Intuit Assist, suggestions | Every line coded on arrival, VAT and transfers included (4 credits a line); manual coding free |
| Emailing invoices and reminders | All plans | All plans | Paid plans, from £5 |
| Connected apps | Very large marketplace | Large marketplace | Small; reconciliation, analysis and year-end built in instead |
| Switching in | Through conversion partners | Through conversion partners | One-click import from Xero, QuickBooks or Sage, free |
Xero and QuickBooks prices exclude VAT and are list prices after introductory offers. IQ Books prices as listed on the ReconcileIQ pricing page.
Where each one genuinely wins
Xero
- Payroll inside the plan from Grow upwards, with no separate subscription
- One of the widest choices of connected apps
- Most UK accountants already know it
- Simple at £7 is a cheap home for non-VAT sole traders and landlords
QuickBooks
- The cheapest VAT-capable plan, £16
- Sole Trader Plus at £10 covers MTD for Income Tax end to end
- A strong mobile app with mileage tracking
- Inventory, projects and budgets together on Plus
IQ Books
- The whole ledger, and MTD filing, on a free plan
- Multi-currency, stock, projects and fixed assets without a tier jump
- Codes the books for you rather than asking you to confirm each line
- Reconciliation and 44 analysis modules built in
The honest case for Xero
If you employ people, Xero is the easiest of the three to live with, because payroll sits inside Grow, Comprehensive and Ultimate rather than being a second subscription. Its app marketplace is one of the deepest anywhere, so whatever niche tool your trade relies on, there is a good chance it connects. And if your accountant runs their practice on Xero, being on the same software saves real time at year end. The cost is that the plan you need tends to be Grow or above, and you now pay £468 a year for it before add-ons.
The honest case for QuickBooks
QuickBooks is the better buy at the bottom of the market. A VAT-registered one-person business can file VAT returns on Simple Start for £16, and a sole trader who is not VAT registered gets MTD for Income Tax, including the final declaration, on Sole Trader Plus for £10. Its mobile app is one of the better ones for receipts and mileage. The catch arrives as you grow: bills need Essentials, and inventory and projects need Plus, by which point you are paying £56 a month plus payroll.
The honest case for IQ Books, and its limits
IQ Books is the native ledger at the centre of ReconcileIQ, and it is priced the other way round. The free plan is one organisation with the full double-entry ledger: customers and sales invoices, suppliers and bills, bank, VAT, stock, projects, fixed assets, prepayments and accruals, and multi-currency. VAT returns and Income Tax quarterly updates file to HMRC under Making Tax Digital on every plan, the free one included. What costs money is automation: CodeIQ codes each bank line on arrival, account, VAT, transfers and invoice matches, for 4 credits a line, drawing on 1,000 free credits and then a paid plan from £5 a month with 5,000 credits. Coding a line by hand is always free. If you run a practice, the per-client side of this is on our page for accounting practices.
It has real gaps, and you should know them before you choose it:
- No payroll. IQ Books posts your payroll provider's journal to the right accounts, but it does not run payroll or file RTI.
- No Income Tax final declaration yet. Quarterly updates file from IQ Books; the end-of-year declaration goes through other MTD software or your accountant for now.
- Emailing invoices needs a paid plan. You can raise, print and share invoices free; sending them and automatic reminders from the app start at £5 a month.
- A small app ecosystem. Instead of a marketplace, reconciliation, analysis and year-end working papers are built into the same ledger.
What a year actually costs: three UK businesses
Headline prices only mean something against a real business. Here are three common shapes, priced on list prices excluding VAT.
| Business | Xero | QuickBooks | IQ Books |
|---|---|---|---|
| Sole trader, not VAT registered, under MTD for Income Tax | Simple: £84 a year | Sole Trader Plus: £120 a year | Free: £0 (final declaration via other MTD software) |
| VAT-registered limited company, one person, 40 invoices and 25 bills a month, emails its invoices | Grow: £468 a year | Essentials: £456 a year | Starter: £60 a year (£51 paid annually) |
| Trades in euros, holds stock, two employees | Comprehensive: £660 a year, payroll included | Plus with Payroll Core: about £763 a year | Starter: £60 a year (£51 paid annually), plus a payroll provider |
The third row is the fair warning. If you have staff, IQ Books' saving has to pay for payroll software or a bureau, which Xero bundles. For most small employers it still comes out ahead, but compare the quote you would get for payroll before you assume it.
Switching from Xero or QuickBooks
The reason most businesses stay put is not loyalty, it is the fear of moving: opening balances, re-keying contacts, historic invoices, and the nagging worry that the books will be wrong at year end. That fear is a large part of why price rises stick.
IQ Books removes most of it. You authorise the connection to Xero, QuickBooks or Sage, and it brings across your opening trial balance, your contacts and your open invoices, maps your banks by name, and lands the opening balances before day one. The import can be undone, and migration is free on every plan. The cleanest moment to switch is the first day of a VAT quarter or a new financial year, so nothing straddles two systems. We walk through it step by step in switching accounting software in one click.
So which should you choose?
- Choose Xero if you run payroll for a few people, rely on a specific connected app, or your accountant works in Xero and wants you there.
- Choose QuickBooks if you are a sole trader who wants the Income Tax final declaration in the same app, or a one-person VAT-registered business watching every pound.
- Choose IQ Books if you want the whole ledger and MTD filing without a monthly bill, need multi-currency or stock without a tier jump, or would rather the software coded the bank than ask you to confirm every line.
None of these is a forever decision any more. The switching cost that used to lock businesses in has mostly gone, which means the price rises are now optional.
Try the third option
One organisation, the whole ledger and MTD filing to HMRC on the free plan. Import from Xero or QuickBooks in one click.
Open IQ Books freeFrequently Asked Questions
Neither wins outright. Xero is the better fit if you want payroll included in the plan, a very wide choice of connected apps and an accountant who already works in it. QuickBooks is the better fit for sole traders, for VAT-registered businesses on a tight budget, and for businesses that need inventory and projects in one plan. Compare the specific tier you would need, not the brand.
At the entry level QuickBooks is cheaper: Sole Trader Plus is £10 a month and Simple Start, which files VAT returns, is £16. Xero's cheapest VAT-capable plan, Ignite, is £18 but caps you at 20 invoices and 10 bills a month. In the middle the two are almost level: Xero Grow is £39 and QuickBooks Essentials £38. All prices exclude VAT and ignore introductory discounts.
Yes. IQ Books by ReconcileIQ has a free plan with one organisation and the whole double-entry ledger: invoices, bills, bank, VAT, stock, projects, fixed assets and multi-currency, plus MTD VAT returns and Income Tax quarterly updates filed to HMRC. Emailing invoices from the app and automatic reminders come with paid plans from £5 a month.
Yes, both file MTD VAT returns and both support MTD for Income Tax. Check the tier: Xero Simple (£7) is for businesses that are not VAT registered, and QuickBooks Sole Trader Plus (£10) does not file VAT returns, so VAT-registered businesses need Xero Ignite or QuickBooks Simple Start or above. IQ Books files MTD VAT returns and Income Tax quarterly updates on every plan, including the free one.
Yes. IQ Books imports from Xero, QuickBooks or Sage in one click once you authorise the connection: your opening trial balance, contacts and open invoices come across, banks are mapped by name, and the import can be undone. Migration is free, and the cleanest time to switch is the start of a VAT quarter or a new financial year.
No. IQ Books posts your payroll provider's journal to the right control accounts, but it does not run payroll, file RTI or handle auto-enrolment. If you have employees you will need a payroll bureau or payroll software alongside it, which is one place where Xero, with payroll in its plans, genuinely leads.
Xero pricing in the UK runs from £7 a month (Simple, for businesses that are not VAT registered) through Ignite £18, Grow £39 and Comprehensive £55 to Ultimate £70, since 1 September 2026. QuickBooks pricing in the UK runs from £10 (Sole Trader Plus) through Simple Start £16, Essentials £38 and Plus £56 to Advanced £123. All excluding VAT, before introductory discounts.
Sage includes payroll on every plan, which suits employers. FreeAgent is free with a NatWest, RBS or Mettle business account and is built for freelancers and sole traders. Xero has the widest app ecosystem and accountant familiarity. Our Xero vs QuickBooks vs Sage comparison goes through them plan by plan.
It depends why you are leaving. On price, IQ Books is free for one organisation with MTD filing included, FreeAgent is free with some business bank accounts, and QuickBooks Sole Trader Plus starts at £10. If you need payroll inside the plan, Sage includes it. If the reason is spending less time on bookkeeping, IQ Books codes your bank lines for you as they arrive.
Yes. Switching from QuickBooks to Xero usually goes through Xero's conversion partners or an import of your balances and contacts. IQ Books imports from Xero, QuickBooks and Sage in one step, free, bringing your opening balances, contacts and open invoices across.