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Written by Matchouse
Read more about our contributorKey Facts
- Cloud accounting software is essential for freelancers managing income, expenses, and taxes.
- Tools like FreeAgent, QuickBooks, and Xero offer HMRC-compliant features for MTD (Making Tax Digital).
- Most tools offer automatic invoicing, bank syncing, and mileage tracking.
- Choosing the right tool can reduce admin time and save money on accountant fees.
- Some UK banks offer free access to premium accounting tools with a business account.
đź’Ľ Introduction
Freelancers wear many hats — and unfortunately, one of them is “accountant.” Whether you’re a creative, consultant, or tradesperson, managing your own finances is a must.
Thankfully, there are accounting tools built just for you. In this blog, we break down the best accounting software for freelancers in 2025, including free options and tools that help you stay Making Tax Digital (MTD) compliant.
1. FreeAgent (Free for NatWest, RBS & Mettle Users)
TIP: If you bank with NatWest, RBS or Mettle, you may get FreeAgent completely free.
Why freelancers love it:
- Designed specifically for freelancers and contractors
- Automatically submits VAT returns to HMRC
- Easy-to-use mobile app for mileage tracking
- Custom branded invoices
- Great reporting and project tracking
Best for: UK-based freelancers using business bank accounts with supported banks.
2. QuickBooks Self-Employed
Note: QuickBooks has a dedicated product just for freelancers that focuses on tax deductions, mileage, and invoice tracking.
Key features:
- Easy to track income and expenses
- Categorises business vs. personal transactions
- Automatically estimates income tax
- Sends professional invoices and tracks payments
Best for: Freelancers looking for a reliable, widely used tool with powerful tax features.
3. Xero
Important: Xero is powerful and scalable, making it ideal if you're planning to grow or work with accountants.
Features freelancers like:
- Direct bank feeds
- Multi-currency support
- Integrated payroll options
- Customisable invoices and payment reminders
Best for: Freelancers who plan to scale, hire, or need advanced features.
4. Zoho Books
- Affordable and scalable
- Built-in time tracking
- Connects to 50+ payment gateways
- Offers workflow automation for invoices, reminders, and approvals
Best for: Budget-conscious freelancers who want great functionality without paying extra for features they don't use.
5. Coconut (Built for Sole Traders)
Coconut is a UK-based tool tailored to freelancers, sole traders and self-employed professionals.
Why it’s different:
- All-in-one current account and accounting tool
- Designed for Making Tax Digital (MTD)
- Tracks income, expenses, and tax in real-time
- Simplifies end-of-year submissions
TIP: Coconut automatically calculates how much tax you owe throughout the year so you’re never caught off guard.
Best for: Sole traders and freelancers who want simplicity and real-time tax insights.
6. Crunch
Crunch combines software with real human support.
- Accountancy software and personal accountant
- Unlimited invoices and expenses
- Year-end filings included in premium plans
- Optional IR35 support for contractors
Best for: Freelancers who want human + software in one bundle.
🔍 Comparison Table
| Tool | Best For | MTD Compatible | Price Range |
|---|---|---|---|
| FreeAgent | NatWest/RBS/Mettle users | ✅ Yes | Free–£29/month |
| QuickBooks SE | Simplicity & tax features | ✅ Yes | £10–£18/month |
| Xero | Scaling freelancers | ✅ Yes | £14–£30/month |
| Zoho Books | Budget-conscious freelancers | ✅ Yes | £0–£12/month |
| Coconut | Sole traders in the UK | ✅ Yes | £9–£15/month |
| Crunch | Support with real accountants | âś… Yes | From ÂŁ24.50/month |
đź’ˇ Choosing the Right Tool
- Consider how often you invoice clients and track expenses
- Decide if you need full MTD compliance or just basic tools
- Check for free plans through your business bank
- Think about whether you prefer app-only tools or full web platforms
- Don’t overpay for features you won’t use — simpler is better for many freelancers
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