TapTax vs Xero vs QuickBooks for Sole Traders

If you are a sole trader preparing for Making Tax Digital, you have probably come across Xero and QuickBooks. They are the two biggest names in cloud accounting, used by millions of businesses worldwide.

This comparison used to have an easy answer: the big platforms cost £30 a month and a purpose-built MTD app cost £5, so the price gap did the arguing. That answer is out of date in two separate ways, and both corrections cut against us rather than for us.

First, Xero retired its Starter, Standard and Premium plans for new customers in September 2024. Any comparison still pricing Xero Starter at £15 or Standard at £30 is describing a plan line that has not been sold for roughly two years. Second, both big brands now sell a cheap entry tier aimed squarely at sole traders: Xero Simple at £7 plus VAT and QuickBooks Sole Trader at £10 plus VAT.

So the price gap at the entry tier has largely closed. This page is rebuilt on what actually separates them now.

The Core Difference

• Xero and QuickBooks are full accounting platforms. They handle invoicing, payroll, multi-currency, bank reconciliation, financial reporting and project tracking. MTD compliance is one feature among many, and the entry tier is the bottom of a ladder.

• TapTax is a focused MTD compliance tool for sole traders. Income tracking, expense categorisation, receipt scanning and quarterly filing. It does not try to be a full accounting suite.

That distinction still drives everything: complexity, setup time and the daily experience. It just no longer drives the price the way it did.

Pricing, Checked August 2026

Three things about that table are worth saying out loud rather than leaving in the cells.

Xero's full current line is Simple £7, Ignite £16, Grow £37, Comprehensive £50 and Ultimate £65 a month excluding VAT. Add 20% for your real cost. Ignite is reported as capped at 20 invoices and 10 bills a month, with unlimited invoicing above it, which is what moves an actively invoicing sole trader from £16 to £37. That cap comes from independent UK pricing trackers that agree with each other, because Xero's own plan pages were not reachable when we tried to read them in August 2026. Treat it as corroborated rather than confirmed and check it with Xero.

QuickBooks above the sole-trader tier is a blank on this page on purpose. VAT returns and fuller reporting sit on higher plans, and we have not verified what those plans currently cost. Rather than repeat an older figure we cannot stand behind, we are leaving them unpriced and telling you they are a step up. Check them directly if you think you will need them.

Xero has confirmed a further UK price rise from 1 September 2026. Every Xero figure here is an August 2026 snapshot taken shortly before that date.

The honest summary of the table: at the tier a sole trader would actually start on, these three sit within roughly £100 a year of each other, and TapTax's clearest pricing advantage is no longer the monthly rate but the free tier, which neither big brand offers at any level.

“When the price gap closes, the comparison does not disappear. It just moves to the thing the price was distracting you from.”

What Actually Separates Them: the Year End

HMRC publishes a feature grid for every product on its find-MTD-software service, using its own three-state scale of ready now, in development or not included. We scraped all 152 listings on 2 October 2026.

Xero and QuickBooks on HMRC's MTD for Income Tax directory, as graded on 2 October 2026.

Product	Free	Sole trader	UK property	Foreign property	Mobile app	Return items
Xero	Not included	Ready now	Ready now	Ready now	Android; Apple iOS	4/16
QuickBooks (Intuit)	Not included	Ready now	Ready now	Not included	Android; Apple iOS	15/16

HMRC lists what each vendor declares. Feature flags, mobile-app support in particular, are vendor claims rather than verified facts, and listings change. Check with the vendor before you buy. Data: HMRC find-MTD-software service (tax.service.gov.uk), scraped 2 October 2026.

The 16 tax-return items

Quarterly updates cover your business income and expenses. The 16 return items are everything else that has to reach the return before it is finished: interest, dividends, employment income, state and private pensions, partnership income, pension contributions, the Construction Industry Scheme, charitable giving, capital gains, student loan, marriage allowance, voluntary Class 2 National Insurance and the High Income Child Benefit Charge. HMRC grades each one separately for every listed product.

QuickBooks is graded 15 of 16 ready, with nothing left in development. Xero is graded 2 of 16, with 14 in development. That is the largest single gap anywhere in this comparison, and it does not depend on a contested invoice cap, a promotional rate or a price rise. It is HMRC's own published grade.

TapTax sits between them and we would rather publish that than dodge it: roughly six to eight of the 16 items are live today, with pensions income, CIS, capital gains and partnership income still to come. That figure is our own estimate rather than an HMRC grade, because TapTax is HMRC-recognised, with its directory listing pending, so it had no row on the find-MTD-software directory at our 22 September 2026 scrape.

103of 152 (68%)cannot complete a single tax-return itemHMRC MTD for Income Tax directory, scraped 2 October 2026

Set against that floor, Xero at 2 is not an outlier so much as slightly above a very low bar, and QuickBooks at 15 is genuinely near the top of the field.

Two smaller rows go the other way. Xero is graded ready on foreign property and QuickBooks is not included, and only 77 of 152 (51%) of the directory can report an overseas rental at all. QuickBooks supports HMRC Assist submission feedback, one of 36 of 152 (24%) products that do, where Xero is graded not included.

You can compare any of these against the rest of the field in the MTD software directory, and the full analysis is in our review of every HMRC-listed MTD tool.

Feature-by-Feature Comparison

MTD quarterly filing

Each of these will meet the core quarterly requirement. The difference is in the experience. TapTax reduces filing to a single review-and-submit action. Xero and QuickBooks require navigating through several screens and menus to find and submit your MTD return.

Expense tracking and categorisation

This is where TapTax stands apart. AI expense categorisation analyses each transaction and suggests the correct HMRC category. You swipe right to confirm or left to change it, and the AI learns from your corrections.

Xero uses bank rules you set up per vendor. This works, but it requires manual configuration and does not adapt to new vendors or unusual transactions on its own.

Receipt scanning

Receipt scanning is available everywhere here, though Xero's implementation runs through Hubdoc, which is included but is a separate app. TapTax and QuickBooks have capture built into the main app.

Invoicing

TapTax now invoices too: six templates in your own colours, saved clients and a rate card, repeating invoices and reminders that chase late payers, with three invoices on the free plan and unlimited on Starter at £4.99 a month. What it does not do is time tracking, card payments on an invoice or VAT returns.

If invoicing is essential to your workflow, the tier arithmetic matters. Xero's reported cap on Ignite is what pushes regular invoicers to Grow at £37 plus VAT a month, roughly £533 a year including VAT. Price the tier you will land on, not the one on the homepage.

Mobile experience

TapTax is designed mobile-first, from logging expenses to filing quarterly returns. That matters because most sole traders are out working during the day, not sitting at a desk.

Xero and QuickBooks have mobile apps, but they are companions to the main web platform. Some features are unavailable or harder to use on a phone, and complex tasks often mean switching to a desktop browser.

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Setup and learning curve

Xero and QuickBooks ask you to set up a chart of accounts, configure bank rules and understand concepts like double-entry bookkeeping. Many users want an accountant for the initial setup.

TapTax skips all of this. Import your bank statement and you are ready. The accounting structure is handled behind the scenes and you work with plain-language categories like "travel" and "materials".

Reporting

If you need detailed financial reports, the platforms are stronger. They produce balance sheets, cash flow statements, aged receivables and dozens of custom reports.

For most sole traders, a clear view of income, expenses and estimated tax owed is all they need.

Customer support

QuickBooks has the edge here with phone support. Xero is famously email and chat only. TapTax offers chat and email with a UK-based team.

The Summary Table

HMRC grades apply to a vendor's directory listing rather than to an individual plan, so every Xero plan carries Xero's listing grade.

Which Should You Choose?

Choose QuickBooks if

• Your return has anything in it beyond business income and expenses. Pensions, dividends, CIS or capital gains all sit inside the 15 of 16 it is graded ready on, and inside the 14 Xero has in development.
• You want HMRC Assist checking your figures before submission.
• Phone support matters to you.
• You want a cheap first six months and will remember when the promotional rate ends.

Choose Xero if

• You need full accounting with invoicing, bills and financial reporting, and you have priced the tier your invoice volume actually lands you on rather than the entry one.
• You have an overseas rental. QuickBooks is graded not included on foreign property and Xero is graded ready.
• Your accountant already works in Xero, which in UK practice is a genuine and common reason.
• You want multi-currency or expect to grow towards employees.

Choose TapTax if

• You need MTD compliance without the accounting overhead, and want the fastest filing experience.
• You work on the go and want a genuinely mobile-first tool.
• You want a free tier to start on, which neither platform offers.
• You do not need invoicing, payroll or detailed financial reports.
• Your return is business income and expenses, or close to it. If it is not, weigh the year-end grades above carefully first.

And a case for none of the three

If your priority is simply the lowest cost for a complete return, look wider before you pick from this page. Several products on HMRC's directory file quarterly updates and the final declaration for nothing at all, and one of them, MTD 4 Income Tax, is graded ready on every one of the 16 return items for £20 a year. The MTD software directory has the whole field.

The Real Question

The right software is not the one with the most features, and it is no longer reliably the cheapest either, because the cheap entry tiers have arrived and they are thin in different ways.

The question worth asking is what your return contains. If it is business income and expenses only, this is a comparison about scope and daily friction, and a purpose-built tool wins on both. If your return has a pension, a dividend, a CIS deduction or a capital gain in it, the comparison is about the 16 return items, and on that axis HMRC's own grid separates these three more sharply than any marketing page does.

Also considering FreeAgent? See our TapTax vs FreeAgent comparison, or the focused TapTax vs Xero breakdown.

File your MTD quarterly updates in minutes

TapTax imports your bank statements, categorises expenses automatically, and submits to HMRC with a tap. Free plan, no card required.

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People also ask

Is Xero or QuickBooks better for sole traders?

QuickBooks, on the evidence that is hardest to argue with. HMRC grades QuickBooks 15 of its 16 tax-return items ready with nothing in development, against Xero at 2 of 16 with 14 in development, at our 22 September 2026 scrape. QuickBooks Sole Trader is also £10 plus VAT a month against Xero Ignite at £16 plus VAT, although Xero Simple undercuts both at £7 plus VAT. Xero wins on foreign property, which QuickBooks is graded not included on, and on the fact that most UK accountants already work in it.

What happened to Xero Starter, Standard and Premium?

Xero retired all three for new customers in September 2024 and migrated subscribers onto Ignite, Grow, Comprehensive and Ultimate, with Simple below them for basic MTD for Income Tax. As checked in August 2026 the line runs £7, £16, £37, £50 and £65 a month excluding VAT. Prices rose on 1 September 2025 and a further UK rise is confirmed for 1 September 2026, so any figure older than that needs re-checking.

Is TapTax cheaper than Xero and QuickBooks?

Yes, but by less than it used to be, and the free tier is now the bigger difference. TapTax is £0 on its free tier, £49 a year on Starter and £99 on Pro. Xero Simple is roughly £101 a year including VAT and QuickBooks Sole Trader roughly £144, both checked August 2026, and neither has a free tier. The gap widens sharply if you need more than the entry tier: Xero Grow is roughly £533 a year including VAT.

Why is TapTax cheaper than a full accounting platform?

Because it does less on purpose. There is no payroll, no VAT return and no advanced financial reporting, which is most of what drives the cost of a platform like Xero or QuickBooks; invoicing is included. TapTax covers expense tracking, AI categorisation, receipt scanning and quarterly filing. The trade-off is real in both directions, and the year-end return items are where you should check it: TapTax is at roughly six to eight of 16 on our own estimate, ahead of Xero and behind QuickBooks.

Can I switch from Xero or QuickBooks to TapTax?

Yes. Your historical data stays where it is and you should export it for your records before cancelling. TapTax starts fresh from the bank statement you import, so there is no complex migration. The best time to switch is at the start of a new tax year or quarter, though HMRC does not require you to wait for one.