Xero review: the £3.20 is real for six months
Xero Ignite advertises £3.20 a month. That is an 80% new-customer discount that lasts six months, after which you pay £16. Over 24 months that is £307.20 — £121.20 more than QuickBooks, and £307.20 more than FreeAgent costs if you bank with NatWest, RBS, Ulster Bank or Mettle. We are in no affiliate programme, so we earn nothing whichever you pick.
Last verified 31 July 2026. Promotions change roughly monthly — confirm before you subscribe.
Should you buy Xero?
Buy Xero if you are VAT-registered, more than one person needs to log in, and your accountant already works in it. Do not buy Xero to save money, because at £307.20 over 24 months it is the second most expensive entry plan we price and two of its competitors can cost you nothing at all.
That is the whole review in two sentences. The rest of this page is the arithmetic behind it, the specific things Xero does badly, and the names of the products that beat it — including for readers who were about to buy Xero today.
That link goes to Xero’s own UK pricing page and earns us nothing — we are not in their affiliate programme, or anyone else’s. Check the price yourself; promotions change roughly monthly.
Who Xero is for
- VAT-registered businesses. Ignite files VAT at £16, and once VAT is in play the price gap to QuickBooks Simple Start is £9.60 over two years — forty pence a month, which is no reason to choose either way.
- Businesses where several people need logins. Every Xero plan allows unlimited users. QuickBooks Simple Start allows one.
- Anyone whose accountant has already said “use Xero”. The friction of overruling them costs more than £121.20, every time.
- Businesses that will bolt other software onto their accounts. Xero’s app marketplace is the reason most people pay the premium.
Who Xero is not for
- Sole traders who will never register for VAT. QuickBooks Sole Trader does the same job for £186. Take the £121.20.
- Anyone banking with NatWest, RBS, Ulster Bank or Mettle. FreeAgent is £0 for you, permanently. Nothing on this page beats free.
- Owner-managed companies that need payroll. Xero’s cheapest plan with payroll is Comprehensive at £50 — £960 over 24 months against £693 for FreeAgent Limited Company.
- Anyone shopping on headline price. The £3.20 lasts six months and is 6% of what you will pay.
What every Xero plan costs over 24 months
Xero’s UK prices are ex VAT. The introductory rate is 80% off for six months; after month six you pay list price. Year one is shown beside the 24-month total so you can see how front-loaded the saving is.
| Xero plan | Intro price (6 months) | List price | Year one | 24 months | Files VAT? |
|---|---|---|---|---|---|
| Ignite Entry plan | £3.20 × 6 | £16/mo | £115.20 | £307.20 | Yes |
| Grow | £7.40 × 6 | £37/mo | £266.40 | £710.40 | Yes |
| Comprehensive Payroll starts here | £10 × 6 | £50/mo | £360 | £960 | Yes |
| Ultimate | £13 × 6 | £65/mo | £468 | £1,248 | Yes |
All figures ex VAT, monthly billing, no annual prepayment discount applied. The 80% six-month discount is verified on Ignite and applied at the same percentage to the higher tiers for illustration — confirm the offer on the tier you actually want. Xero’s 30-day trial plus one further free month is excluded from every total, which makes Xero look slightly dearer here than it will be in your first year.
Plan limits change more often than prices. We warrant the money on this page, verified 31 July 2026. Feature limits — user counts, invoice caps, what each tier includes — should be confirmed on the vendor’s own plan comparison before you subscribe, because vendors revise them quietly.
The price you will actually pay
Xero charges you £3.20 a month for six months and £16 a month for the next eighteen. Here is what that looks like drawn out, because the shape is the argument.
£3.20 — promotional months 1–6£16 — list price, months 7–24
The three numbers that matter
- (£3.20 × 6) + (£16 × 18) = £307.20. The whole of Xero Ignite over two years, ex VAT.
- £19.20 against £288. The six discounted months against the eighteen that follow. The discount is 6% of what you pay — the headline you were sold is a rounding error in your actual bill.
- £307.20 − £186 = £121.20. What choosing Xero over QuickBooks costs a sole trader who never registers for VAT.
Why this section exists. Every vendor in this market advertises month one and hopes you do not model month twenty-four. Xero’s 80% off is one of the larger discounts here and it still only moves the two-year total by £76.80. If a price comparison does not carry the arithmetic past month six, it is not comparing prices. See the same cliff plotted for all four platforms on the cheapest-over-24-months guide.
What Xero does well
Four things Xero is genuinely good at, none of which are “it is cheap”.
Xero’s real advantages are user seats, extensibility and the fact that a lot of UK accountants already live in it — not price, and not Making Tax Digital compliance, which all four platforms have.
Unlimited users on every plan, including the £16 one
This is the clearest structural difference between Xero and QuickBooks. Xero does not charge per seat, so a £16 Ignite subscription covers you, your bookkeeper and your accountant. QuickBooks Simple Start — the plan you would compare it to at £16 — allows a single user, so adding a second person pushes you to Essentials at £33, or £613.80 over 24 months against Xero’s £307.20. If more than one person touches your books, this single difference reverses the price argument entirely.
The app marketplace is the reason people pay the premium
Xero is built to have other software bolted onto it, and that is the honest justification for the £121.20. If you already know you need your accounts talking to a stock system, a booking system or a payments provider, an ecosystem that your chosen tool already supports is worth more than two years of price difference. If you have no such tool and no plan to get one, you are paying for an option you will never exercise.
The trial is the longest of the four
Xero gives 30 days free plus a further free month. QuickBooks gives 30 days. That extra month matters more than it sounds, because a month is roughly how long it takes to find out whether you will actually keep your bookkeeping up to date — which is the real variable in whether any of this software is worth buying.
The plan ladder is coherent
£16, £37, £50, £65. Payroll for five people arrives at Comprehensive. You can see where you would sit in two years without decoding a feature matrix. That is a low bar, and Xero clears it more cleanly than Sage’s +VAT-quoted ladder does.
What is wrong with Xero
This section is longer than the one above it. That is deliberate, and it is why you are reading this page instead of Xero’s.
Xero’s problems are all versions of the same problem: you pay a premium, and the specific things the premium buys are things a large share of its buyers will never use. Two facts frame everything below: QuickBooks is £121.20 cheaper than Xero over 24 months, and FreeAgent is free — permanently, with the right bank account.
- It is £121.20 more expensive than QuickBooks over two years, for nothing, if you never register for VAT. A sole trader under the VAT threshold gets the same job done by QuickBooks Sole Trader for £186. That is the single largest avoidable cost on this page. Read the QuickBooks review →
- Ignite caps you at 20 invoices a month. Cross that ceiling and there is no intermediate plan — you go straight to Grow at £37, which is £710.40 over 24 months, a 131% increase for invoice volume alone. Twenty invoices is not many. A tradesperson billing weekly clients will breach it in the first busy month. Confirm the current cap on Xero’s own plan page before you commit; caps move.
- The advertised price is 6% of the real one. £19.20 across the promotional half-year against £288 across the eighteen months that follow. Xero is not unusual in this — every vendor here does it — but the 80% figure is the biggest headline discount in the market and it buys the smallest genuine saving relative to how loudly it is advertised.
- The step from Ignite to Grow is brutal. £16 to £37 is a 131% list-price jump with nothing in between. Whatever pushes you over the Ignite line — invoice volume, or a feature you turn out to need — more than doubles your bill overnight.
- Payroll does not start until Comprehensive at £50. For an owner-managed limited company paying one director, that is £960 over 24 months. FreeAgent includes payroll on its £33 Limited Company plan: £693. Xero costs £267 more for the same job. Read the FreeAgent review →
- There is no inbound phone number. Xero’s support model is not built around calling someone. For some people that is irrelevant; for others it is the entire decision, and no feature list changes it. If you know you are the second kind of person, this is disqualifying and you should stop here. Check Xero’s current support page yourself — support models are the thing vendors change most often and we do not warrant it.
- Once you are VAT-registered, Xero has no price argument left at all. QuickBooks Simple Start is £297.60 against Xero Ignite’s £307.20. £9.60 over two years. Which means nobody should ever choose Xero because of money — either it is much dearer, or the difference is forty pence a month. It has to win on fit or it does not win.
- Two competitors can cost you £0. FreeAgent is free permanently with a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account. Sage has a free sole trader tier capped at five invoices a month. Against £0, £307.20 needs a much better argument than “it is the one people have heard of”. The genuinely free options →
Who should buy Xero, and who should buy something else
Most people who land on a Xero review should not buy Xero. Here is how to tell which you are.
Buy Xero if you are VAT-registered and need more than one user, or if your accountant works in it. Buy something else in every other case on this list — and we earn nothing either way, because we are not in any vendor’s affiliate programme.
Buy Xero if…
- You are VAT-registered and more than one person needs a login. Unlimited users at £16 is the best-value seat structure here.
- Your accountant works in Xero. Overruling them costs more in hours than £121.20 saves in licence fees.
- You have a specific third-party tool you need connected, and you have checked it supports Xero.
Buy something else if…
- You bank with NatWest, RBS, Ulster Bank or Mettle. FreeAgent is £0, permanently, and it is on HMRC’s recognised list for Making Tax Digital. £307.20 against £0 is not a comparison. Mettle asks for one transaction a month to keep it active.
- You are a sole trader who will never register for VAT. QuickBooks Sole Trader is £186 — £121.20 less — with no 20-invoice ceiling.
- You send five invoices a month or fewer and are not VAT-registered. Sage Sole Trader Free is £0 permanently. Test the cap against your busiest month, not your average one.
- You run a limited company and need payroll. FreeAgent Limited Company is £693 with payroll included, against £960 for Xero Comprehensive.
- You are VAT-registered, need one user, and want the lowest number. QuickBooks Simple Start is £297.60. It is £9.60 cheaper, which is not a reason on its own — but if nothing else separates them, take the cheaper one.
Go and check the prices yourself
Every link below is the vendor’s own plain UK pricing page. None of them earns us a commission, because Fizoral is not a member of any accounting software affiliate programme — including Xero’s. We would rather you verified our arithmetic against the source than took our word for it.
Does Xero handle Making Tax Digital?
Yes — and so do the other three, which is exactly why it should not affect your decision.
Xero is on HMRC’s recognised list for Making Tax Digital, and so are QuickBooks, FreeAgent and Sage, including the free routes. MTD compatibility is table stakes in 2026, not a differentiator, and any vendor marketing it as a feature is selling you the floor as if it were the ceiling.
What does matter is whether you are in scope and when. Making Tax Digital for Income Tax has been live since 6 April 2026 for people with qualifying income over £50,000, and the next threshold — over £30,000, from 6 April 2027 — is the one most readers of this page are heading for. Qualifying income means gross self-employment plus gross property income: turnover, not profit.
Read the Making Tax Digital pillar for the full timetable, or check whether you are actually in scope before you spend anything on software at all. Confirm your own position with HMRC or an accountant — this page is not tax advice.
The rest of our working
The other three reviews, every head-to-head that features Xero, and the pillar that prices all four side by side.
Pillar
Best UK accounting software, priced over 24 months
All four platforms in one table: QuickBooks £186, Xero £307.20, Sage Accounting Start £378, FreeAgent £399 — or £0, two different ways.
Head to head
Xero vs QuickBooks
The £121.20 gap, and why it shrinks to £9.60 the moment you register for VAT.
Review
QuickBooks review
£186 over 24 months and the cheapest paid plan here — but it cannot file a VAT return, and the £1 becomes £10.
Review
FreeAgent review
£0 forever with a NatWest, RBS, Ulster Bank or Mettle account. £399 if you pay for it, the dearest entry plan we price.
Review
Sage review
A genuinely free tier capped at five invoices a month, and the only vendor here that quotes +VAT: £18 bills at £21.60.
Our workings
How we research
The pricing rules, the sources, the conflicts of interest, and what would make us change a verdict.
How this review was researched
Our method · verified 31 July 2026
Every price on this page was read off Xero’s own UK pricing pages — not a press release, not a review-site database, not another comparison article. Figures are ex VAT, cover the plans named in the table above, and were verified on 31 July 2026. Promotional rates in this category are revised roughly monthly and are almost always for new customers only, so we re-check every figure and move the verification date when we do.
The 24-month totals are arithmetic rather than opinion: six promotional months at the promotional rate, then full list price through to month twenty-four, with the multiplication printed beside each total so you can redo it on your phone.
We publish no scores and no star ratings. A number out of five compresses a decision that depends entirely on whether you are VAT-registered, how many people need logins and who you bank with. We would rather print the arithmetic and let you decide. We are not a member of Xero’s affiliate programme, or anyone else’s, so nothing on this page is written to earn a commission.
We publish our method instead of a byline. A named author is easy to invent and impossible for you to check; a named source, a stated date and printed arithmetic are not. This review is written and maintained by Fizoral as a publication. Read how we research, or tell us about a figure that looks wrong.
Questions people actually ask about Xero
Short answers, with the arithmetic where money is involved.
Is Xero worth it in the UK in 2026?
Xero is worth it if you are VAT-registered and more than one person needs to log in, because unlimited users at £16 a month is the best seat structure of the four platforms we price. It is not worth it if you are shopping on price: Xero Ignite is £307.20 over 24 months against £186 for QuickBooks Sole Trader, and if you bank with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle then FreeAgent is £0 and nothing here competes with that. See all four priced side by side.
How much does Xero actually cost after the discount ends?
£16 a month for Ignite, ex VAT. The advertised £3.20 is an 80% new-customer discount that runs for six months only. The full sum is (£3.20 × 6) + (£16 × 18) = £307.20 over 24 months, of which the discounted period accounts for just £19.20 — about 6% of what you pay. Grow is £710.40, Comprehensive £960 and Ultimate £1,248 on the same basis. See the discount cliff for every platform.
Is Xero cheaper than QuickBooks?
No. QuickBooks is £121.20 cheaper than Xero over 24 months if you never register for VAT — £186 against £307.20 — because QuickBooks Sole Trader is £10 a month to Xero Ignite’s £16. Once you register for VAT the QuickBooks Sole Trader plan is no longer an option, because it cannot file a VAT return, and the comparison becomes Simple Start at £297.60 against Ignite at £307.20. That is £9.60 over two years, or forty pence a month. Read the full Xero vs QuickBooks comparison.
Can I get Xero for free?
Not permanently. Xero gives a 30-day trial plus one further free month, which is the longest trial of the four platforms we price, but it is a trial and it ends. If you want accounting software that is genuinely free rather than temporarily free, there are two routes and neither of them is Xero: FreeAgent is £0 for as long as you hold a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account, and Sage Sole Trader Free is £0 permanently if you send five invoices a month or fewer and are not VAT-registered. The genuinely free options.
Which Xero plan do I actually need?
Most sole traders and small companies need Ignite at £16, which files VAT and costs £307.20 over 24 months. You move up to Grow at £37 — £710.40 over 24 months — if you exceed Ignite’s monthly invoice cap, and to Comprehensive at £50 if you need payroll, which is £960 over 24 months. If payroll is the reason you are moving up, price FreeAgent Limited Company first: it includes payroll at £33 a month, which is £693 over 24 months, £267 less than Xero Comprehensive. Read the FreeAgent review.
Is Xero compatible with Making Tax Digital?
Yes, and so are QuickBooks, FreeAgent and Sage, including the free routes. All four are on HMRC’s recognised list, which makes MTD compatibility table stakes rather than a reason to choose one platform over another. Treat any vendor that markets it as a headline feature with suspicion. What matters more is whether you are in scope: Making Tax Digital for Income Tax applies from 6 April 2026 to qualifying income over £50,000 and from 6 April 2027 to qualifying income over £30,000, counted as gross self-employment plus gross property income. Check whether you are affected.
Does Xero put its prices up?
We cannot promise the £16 will hold, and neither can any review that tells you otherwise. What we can tell you is what the list price was when we checked it: £16 a month for Ignite on 31 July 2026, ex VAT. When you commit to accounting software you are committing to the list price, not the promotional one, and to whatever the list price becomes — which is a further argument for not paying a premium you do not need. We re-verify every figure on this page monthly and move the date when we do. How we research.