Xero vs QuickBooks UK 2026: Prices, MTD and Worked Costs

Xero vs QuickBooks UK 2026 comes down to price at your size and who keeps your books: on list prices QuickBooks is cheaper at the entry level, and Xero costs less once a 10-employee payroll is added. As of 27 October 2026, both are listed as ready for Making Tax Digital for Income Tax, so MTD alone no longer separates them.

TL;DR:

Xero UK plans list at £18, £39, £55 and £70 a month; QuickBooks Online lists at £10, £16, £38, £56 and £123, all excluding VAT.

Over 12 months at list price, a non-VAT sole trader pays £120 on QuickBooks Sole Trader Plus against £216 on Xero Ignite.

A 10-employee company with payroll pays about £630 a year on Xero Grow and £696 on QuickBooks Essentials with Payroll Core.

Both vendors currently advertise 90% off for six months, which cuts a first-year bill by roughly half but does not change the price from month seven.

Choose by your accountant's software first, then by invoice volume, payroll headcount and users; do not choose by the introductory offer.

Which is cheaper, Xero or QuickBooks in the UK?
What do the Xero and QuickBooks plans include?
What does each cost over 12 months for three typical businesses?
Which is better for MTD for Income Tax and VAT?
What about payroll, AI features and client data?
Should you choose Xero or QuickBooks?
How do you test the choice before committing?
Why does independent evidence matter when choosing accounting software?
Realistic expectations: the offer ends after six months
Find your next accounting software tool through The AI Ledger
Frequently asked questions

Which is cheaper, Xero or QuickBooks in the UK?

QuickBooks is cheaper at every entry-level comparison, but the gap closes or reverses when payroll is added. Xero's UK pricing page, read on 27 October 2026, lists Ignite at £18 a month, Grow at £39, Comprehensive at £55 and Ultimate at £70, excluding VAT. Xero also states that it "reserves the right to change pricing at any time".

QuickBooks lists five plans. Intuit's UK pricing page showed Sole Trader Plus at £10, Simple Start at £16, Essentials at £38, Plus at £56 and Advanced at £123 when we read it on 24 October 2026. When we reloaded it on 27 October it rendered without live prices ("Loading live prices"), so the QuickBooks figures below are the 24 October readings, and Intuit's Making Tax Digital page confirms that all prices exclude VAT. Check the live page before you sign.

Plan	Price a month (ex VAT)	Users
QuickBooks Sole Trader Plus	£10	1
QuickBooks Simple Start	£16	1
QuickBooks Essentials	£38	3
QuickBooks Plus	£56	5
QuickBooks Advanced	£123	25
Xero Ignite	£18	Not stated on page
Xero Grow	£39	Not stated on page
Xero Comprehensive	£55	Not stated on page
Xero Ultimate	£70	Not stated on page

Our existing guide to QuickBooks Online pricing in the UK covers the Intuit plans in more depth, including the accountant side.

Pro Tip: Price the plan you will actually need, not the cheapest headline. Xero Ignite caps invoices and bills, and QuickBooks Sole Trader Plus cannot submit VAT returns, so many businesses outgrow the cheapest tier within a quarter.

What do the Xero and QuickBooks plans include?

The main differences are limits on volume, users and VAT. Xero's page says Ignite allows quotes plus 20 invoices and entry of 10 bills, and that the automatic bank reconciliation add-on costs £3.50 a month on Ignite while Grow and above include it. Multicurrency starts at Comprehensive (£55), and the Projects feature is Ultimate only.

On QuickBooks, Intuit's page lists VAT submission to HMRC and a VAT pre-file check from Simple Start upwards, and says VAT submission and the VAT error checker are unavailable on Sole Trader Plus. Multicurrency and the Pay Bills feature are listed from Essentials (£38), and project management and profitability from Plus (£56).

Reporting also differs. Xero Analytics is included in Xero business plans, with a cash flow forecast of 30 days on Ignite, 60 on Grow, 90 on Comprehensive and 180 on Ultimate. QuickBooks puts AI insights and anomaly detection on Plus and above, and its Finance AI feature on Advanced only.

Feature	Xero	QuickBooks
Cheapest plan that files VAT	Ignite, £18	Simple Start, £16
Entry limits	20 invoices, 10 bills on Ignite	No invoice cap stated on page; no VAT filing on Sole Trader Plus
Multicurrency	Comprehensive, £55	Essentials, £38
Projects	Ultimate, £70	Plus, £56
Editor score (The AI Ledger)	4.5 out of 5	4.3 out of 5

The editor scores come from the directory: Xero (XeroForce & JAX) has an editor score of 4.5 out of 5 and QuickBooks + Intuit Intelligence 4.3 out of 5. The listings were verified against the vendors' sites on 14 and 27 October 2026 respectively. We have not tested either product hands-on.

What does each cost over 12 months for three typical businesses?

For a non-VAT sole trader QuickBooks costs £120 a year at list price against £216 on Xero, while for a 10-employee company with payroll Xero is £66 cheaper. All figures exclude VAT and use the list prices above. The offer columns apply the advertised 90% off for six months to the base plan only.

Business 1: a non-VAT sole trader or landlord, MTD for Income Tax only.

Plan	List, 12 months	With 90% off for 6 months
QuickBooks Sole Trader Plus	£10 × 12 = £120	(£1 × 6) + (£10 × 6) = £66
Xero Ignite	£18 × 12 = £216	(£1.80 × 6) + (£18 × 6) = £118.80

Business 2: a VAT-registered trader sending about 50 invoices a month. Xero Ignite stops at 20 invoices, so Grow is the realistic plan.

Plan	List, 12 months	With 90% off for 6 months
QuickBooks Simple Start	£16 × 12 = £192	(£1.60 × 6) + (£16 × 6) = £105.60
QuickBooks Essentials (3 users, Pay Bills)	£38 × 12 = £456	(£3.80 × 6) + (£38 × 6) = £250.80
Xero Grow	£39 × 12 = £468	(£3.90 × 6) + (£39 × 6) = £257.40

With VAT at 20% the Simple Start figure becomes £192 × 1.2 = £230.40. If you need three users and bill handling, Essentials and Grow are within £12 a year of each other.

Business 3: a limited company with 10 employees on payroll. Payroll is charged differently. Intuit's page lists Payroll Core at £5 a month plus £1.50 per employee. Xero's pricing page lists £1.50 per additional person on Grow and Comprehensive, with 1 and 5 people included.

Setup	Monthly sum	12 months
QuickBooks Simple Start + Payroll Core (1 user)	£16 + £5 + (10 × £1.50) = £36	£432
QuickBooks Essentials + Payroll Core (3 users)	£38 + £5 + (10 × £1.50) = £58	£696
Xero Grow (1 included, 9 extra)	£39 + (9 × £1.50) = £52.50	£630
Xero Comprehensive (5 included, 5 extra)	£55 + (5 × £1.50) = £62.50	£750
Xero Ultimate (10 included)	£70	£840

The like-for-like comparison depends on users: if one person does everything, QuickBooks Simple Start with payroll is £198 a year cheaper than Xero Grow. If three people need access and bills, Xero Grow is £66 cheaper than QuickBooks Essentials with payroll. Try QuickBooks (affiliate link)

The AI Ledger earns a commission if you sign up through a link marked affiliate. It never changes an editor score.

Pro Tip: Both vendors price offers at the base plan. Payroll fees, add-ons and the move to the full price at month seven are where a first-year saving turns into a second-year surprise, so budget on the list price.

Which is better for MTD for Income Tax and VAT?

Neither has a clear MTD advantage: both are listed as ready for MTD for Income Tax and both submit VAT returns. GOV.UK's eligibility guidance, last updated 26 March 2026, says sole traders and landlords with qualifying income over £50,000 should have started on 6 April 2026, with the £30,000 threshold from 6 April 2027 and £20,000 from 6 April 2028.

Xero's pricing page lists MTD and VAT returns as included on every plan, including Ignite at £18, and our listing records every plan as ready for MTD for Income Tax. Intuit tags Sole Trader Plus and Simple Start as "MTD READY" on its page and lists the other three plans without a statement either way, so confirm with Intuit that Essentials, Plus and Advanced cover it if you move up.

GOV.UK's software guidance, updated 13 July 2026, describes two types: software that creates digital records and bridging software that connects to existing records such as spreadsheets. It also says free products exist for people with simple tax affairs, which may have transaction limits.

For a practice running dozens of MTD clients, per-client software cost matters more than the ledger brand, and we compare it in MTD Income Tax software for accountants: cost per client. The threshold rules are in our MTD Income Tax threshold explainer.

What about payroll, AI features and client data?

Payroll is built into Xero plans from Grow, while QuickBooks sells it as an add-on in three tiers. Xero's payroll page lists automatic Full Payment Submissions, workplace pension enrolment with Nest and The People's Pension, statutory pay calculations and CIS deductions. Intuit lists Payroll Core at £5 plus £1.50 per employee, Premium at £10 plus £2.00 and Elite at £15 plus £3.00. Other options sit in our payroll and HR category.

On AI, the vendors differ in approach. Xero's JAX answers questions, drafts invoices and quotes, and on 14 October 2026 Xero launched a connected app for Google Gemini; our listing records that any change to financial data needs the user's confirmation. Intuit's assistant, Intuit Intelligence, is labelled beta on the pricing page, with limited queries per month.

The comparison most buyers want, where client data is hosted and whether the vendor trains models on it, is not something we verified for this article. Rather than guess, the table below marks what we confirmed and what you should check on each vendor's trust page.

Question	Xero	QuickBooks
Hosting location	Not checked for this article	Not checked for this article
Trains on client data	Not checked for this article	Not checked for this article
Read only or write back	Gemini app: changes need user confirmation (vendor claim)	Intuit says its agents flag items for review; not checked further

Receipt capture is a separate decision. Many practices keep Dext, which has an editor score of 4.7 out of 5, on top of either ledger; our best receipt capture software guide compares the options.

Should you choose Xero or QuickBooks?

Choose the ledger your accountant already uses, then apply these rules. The AI Ledger lists Xero as a "UK default ledger", and the company says it has around 250,000 accountants and bookkeepers in its partner programme, so many practices are Xero-first. That is a reason to ask, not a reason to buy.

Choose QuickBooks if:

you are a non-VAT sole trader or landlord who only needs MTD for Income Tax, where £120 a year beats £216;
you are VAT-registered, work alone and want the cheapest filing plan at £16 a month;
your accountant bills QuickBooks wholesale and passes on the discount; or
you need multicurrency below £55 a month, since Essentials at £38 includes it.

Choose Xero if:

you have several employees and want payroll bundled into the plan price;
your accountant works in Xero and uses its practice tools;
you want a longer cash flow forecast built in, 90 days at £55 or 180 days at £70; or
you need ledger and AI connections to Microsoft 365 Copilot, Claude or Google Gemini, which our Xero listing records.

Where each falls short. Xero Ignite's 20-invoice and 10-bill limits push most trading businesses to £39. QuickBooks plans past Simple Start climb steeply, with Advanced at £123 and its Finance AI unavailable alongside multicurrency. Neither vendor's AI features should drive the decision while Intuit labels its own assistant beta and Xero's XeroForce builder is still in alpha.

QuickBooks accountants should also note that QuickBooks Online Accountant ends on 31 December 2026; see QuickBooks Online Accountant replacement. Rivals such as Sage, listed with Sage Copilot at an editor score of 4.0 out of 5, may beat both on price for a small employer.

How do you test the choice before committing?

Run the same two weeks of real transactions through each trial and compare the time and errors. Intuit says all five plans have a free 30-day trial, but taking the discount means you are not eligible for it, so the trial comes first.

Export 30 days of bank transactions and 20 invoices from your current system.
Start the QuickBooks 30-day trial on the plan you would buy, and Xero's one-month-free option if you want the same test length.
Connect the bank feed, import the invoices and note how many transactions need manual coding.
File a dummy VAT return in each, if you are VAT-registered, up to the review screen.
Run one payroll in each for a test employee, and check pension and HMRC submission steps.
Ask your accountant which they support and what each costs to maintain, then decide.

Use The AI Ledger compare tool to line up the listings side by side while you do this.

Why does independent evidence matter when choosing accounting software?

Independent evidence matters because both vendors' pricing pages lead with a 90% introductory offer rather than the price you pay from month seven. Our editor scores and last verified dates sit alongside the vendor's own claims, and affiliate links never affect scores. The two scores here, 4.5 and 4.3 out of 5, are close, which tells you the tools are comparable and the decision should rest on your numbers.

We label vendor statements as the vendor's own. Browse the full directory to see each listing's verification date and verdict.

Realistic expectations: the offer ends after six months

A 90% discount for six months is a customer acquisition cost the vendor recovers from month seven. Plan your cash flow on the list price, and treat the saving as a bonus rather than the budget.

Prices also move: Xero says it can change them at any time, and Intuit's page showed no live prices on the day we rechecked. Review your plan and your actual usage every twelve months.

Find your next accounting software tool through The AI Ledger

Both ledgers sit in the reporting and dashboards category, alongside other tools that connect to them. To shortlist by task, client count and ledger, use the AI Ledger finder, then check each tool's verification date.

Try QuickBooks (affiliate link)

Frequently asked questions

Is Xero or QuickBooks cheaper in the UK?

QuickBooks is cheaper at entry level: Sole Trader Plus is £10 a month and Simple Start £16, against Xero Ignite at £18, all excluding VAT. Once a 10-employee payroll is added, Xero Grow at about £52.50 a month beats QuickBooks Essentials with Payroll Core at £58 for a three-user firm. Prices were read from the vendors' pages in October 2026.

Do Xero and QuickBooks both support MTD for Income Tax?

Yes. Xero's pricing page lists MTD as included on every plan, and QuickBooks tags Sole Trader Plus and Simple Start as MTD ready on its pricing page. GOV.UK says the £30,000 income threshold starts on 6 April 2027 and £20,000 on 6 April 2028. Confirm coverage for the QuickBooks plan you plan to buy.

Can I get a discount on Xero or QuickBooks?

Both vendors currently advertise 90% off for six months for new customers. Xero's page shows Ignite at £1.80 for six months before £18, and Intuit's page states 90% off for six months with no end date given. Intuit's terms say taking the discount means no free trial. Neither offer changes the price from month seven.

Is QuickBooks or Xero better for payroll?

It depends on headcount. Xero includes payroll for 1 person on Grow, 5 on Comprehensive and 10 on Ultimate, at £1.50 per extra person on Grow and Comprehensive. QuickBooks charges Payroll Core at £5 a month plus £1.50 per employee. For 10 employees, Xero Grow costs £52.50 a month and QuickBooks Simple Start with Core £36.