Last updated: March 2026
Cloud accounting software in the UK compared (how to choose)
This is a framework for comparing tools—not a ranking. UK businesses usually pair a core ledger with capture or AP tools; see also our 2026 market overview. Pricing and promotions change daily—confirm on each vendor’s site.
What “cloud” implies
Cloud accounting software runs in the browser or apps, stores data on the vendor’s infrastructure (with backups and security you should review), and updates without manual installs. For UK VAT, MTD-registered businesses must use HMRC-recognised compatible software (or permitted bridging arrangements)—check HMRC’s list before you rely on a product for filing.
Comparison at a glance
| Topic | What to look for |
|---|---|
| MTD for VAT | Must meet HMRC MTD for VAT rules; test filing before go-live. |
| Bank feeds | Which banks supported; frequency; rules for cash coding. |
| Multi-user & roles | Accountant access, approval workflows, audit trail. |
| Payroll | Included vs add-on; RTI compliance; pensions integration. |
| Inventory / projects | If you need stock or job costing, confirm tier limits. |
| Pricing model | Per organisation vs per user; feature tiers; annual vs monthly. |
Known UK-market products (non-exhaustive)
Indicative positioning only. Pricing is not from HMRC—it is taken from vendors’ public pages or press summaries and changes often; verify before you buy. Confirm MTD compatibility on GOV.UK.
| Product | Notes | UK pricing (indicative) |
|---|---|---|
| Xero | Broad SME adoption; large app marketplace; payroll often extra. | Tiered plans often cited from about £7–£65+/month (vendor promos frequent). |
| QuickBooks Online | Strong UK brand; many plan levels from self-employed to larger SMEs. | Often roughly £12–£115+/month depending on tier; heavy new-customer discounts. |
| FreeAgent | Micro-business and contractor friendly; bank partner free offers common. | Paid tiers; free for qualifying NatWest Group customers; add-ons for capture. |
| Sage Business Cloud | Compliance and payroll depth; wider Sage portfolio for larger entities. | Commonly cited roughly £15–£60+/month for accounting tiers before payroll. |
| Dext | Pre-accounting capture; integrates with major ledgers—not a full substitute for reconciliation workflows. | Volume- and plan-dependent; request a quote from Dext for your doc counts. |
No endorsement implied. Trial multiple products with your own sample data where possible. For the gap between posting and proving supplier balances, read AP automation vs bookkeeping.
Pros and cons (general)
Typical advantages
- Access anywhere; fewer IT headaches
- Regular updates and bank feed automation
- Easier collaboration with your accountant
Watch-outs
- Ongoing subscription cost
- Dependency on vendor uptime and support
- Migration effort if you switch later
Related guides
Disclaimer
Software features and tax law change. Price bands are not from HMRC. This page is editorial opinion only, not a recommendation to buy a specific product.