Fizoral Over 24 months, ex VAT: Xero £307.20 · Sage Start £378 · Sage Sole Trader Free £0 Try Xero free →

Ad / affiliate disclosure: Fizoral is funded by affiliate commission. When we are a member of a vendor’s affiliate programme, links to that vendor are affiliate links and we may earn a commission at no extra cost to you. Where we are not in a vendor’s programme, our links are ordinary links and we earn nothing. Commission never changes our recommendations, and we tell you below exactly where each product beats the ones we earn from. Sage’s Sole Trader Free plan costs £0 forever and pays nobody anything — we still put it in the second section of this page. All prices on this page are normalised to ex VAT because Sage quotes +VAT and Xero does not; the inc-VAT figures are printed alongside them. Read the full disclosure.

Updated 31 July 2026 · UK pricing · normalised ex VAT

Everyone compares month one. We compared month twenty-four.

Xero is running 80% off for six months. Sage is running three months free. Neither of those is a price — they are hooks, and they expire long before your second year does. Here is what Xero and Sage actually cost a UK business over two years, with Sage’s +VAT pricing converted so the two columns can honestly sit next to each other.

The short answer, before you scroll

If you send five invoices a month or fewer and you are not VAT-registered, take Sage Sole Trader Free. It costs £0, permanently, and it is not a trial. We earn nothing when you do this, and it is the second thing on this page anyway, because nothing here beats free. Read the five-invoice reality check before you assume it fits.

If you are VAT-registered, Xero is cheaper. Over 24 months you pay £307.20 for Xero Ignite against £378 for Sage Accounting Start — or £453.60 for Sage against £368.64 for Xero if you cannot reclaim the VAT. If you are a sole trader who is not VAT-registered but sends more than five invoices a month, Sage wins: its £7 Sole Trader tier is £147 over two years against Xero’s £307.20.

Is Sage’s free tier enough for me? See the 24-month maths

No email required. Nothing gated. We tell you where the free option is before we tell you where the commission is.

Priced from the vendors’ own UK pages Sage’s +VAT prices converted, both ways shown Arithmetic shown in full
Do this first

Is Sage’s free tier enough for you?

Sage Sole Trader Free is a real product at a real price of nothing. It is also capped at five invoices a month and cannot touch VAT. Two questions settle whether it fits — and if it does, you should stop reading and take it.

1. In your busiest month, how many invoices do you send?

Use your worst month, not your average one. Five is a ceiling, not a target, and Sage stops you at the sixth rather than billing you for it.

2. Are you registered for VAT?

Include “not yet, but I expect to be within two years” as a yes — migrating mid-year is the expensive way to find out.

Five invoices a month or fewer, and not VAT-registered: take Sage Sole Trader Free. It is £0 permanently, not a trial, and over 24 months you pay nothing against £307.20 for Xero Ignite. We are paid no commission on this route.

Six or more invoices a month, and not VAT-registered: the free tier will not hold you. Sage Sole Trader at £7+VAT is £147 over 24 months ex VAT (£176.40 inc VAT) against Xero Ignite’s £307.20. Sage is £160.20 cheaper and we earn less for saying so.

VAT-registered, up to 20 invoices a month: Sage’s free and £7 tiers are both out — neither files MTD VAT. It is Xero Ignite at £307.20 against Sage Accounting Start at £378 ex VAT (£453.60 inc VAT). Xero wins by £70.80.

VAT-registered, more than 20 invoices a month: you outgrow Xero Ignite’s 20-invoice cap and need Xero Grow at £710.40. Sage Accounting Start at £378 has no invoice ceiling and is £332.40 cheaper. Sage wins this one outright.

The five-invoice reality check. A consultant on four monthly retainers plus one ad-hoc job is already at the ceiling. Anyone who invoices per job rather than per month will pass it in a single busy week. There is no overage charge — Sage simply stops you and asks you to upgrade — so the cost of getting this wrong is an interrupted billing run, not a surprise bill. The free plan also cannot file a VAT return, so registering for VAT ends it regardless of volume. Verified 31 July 2026.

The discount trap

Two years of billing, not two months

Solid bars are total spend over 24 months, ex VAT for both vendors. The dashed line marks the end of year one — everything right of it is the real price, the one you pay for as long as you stay. Pick the row that describes you.

Which describes your business?

Cheapest over 24 months The more expensive option End of year one

All bars ex VAT, so Sage’s “+VAT” prices are shown at their bare ex-VAT value — the same basis as Xero’s. Sage inc-VAT totals are given in each bar’s sub-label and in the VAT section. Assumes the new-customer promotions running on 31 July 2026 — 80% off six months at Xero, three months free at Sage — then full list price. Promotions change monthly. Always confirm on the vendor’s own page before you commit. See the full arithmetic.

The other trap

Sage quotes +VAT. Xero doesn’t. Here is the same table both ways.

This is the single easiest way to be misled in this comparison, and most affiliate pages fall straight into it. Sage advertises Accounting Start at £18+VAT. Xero advertises Ignite at £16. Both of those are ex-VAT figures, so £2 a month really is the like-for-like gap. What the “+VAT” suffix hides is that neither headline is your bill: Sage’s is £21.60 and Xero’s is £19.20. We show you both views and normalise to ex VAT for every headline on this page.

Every headline figure on this page is ex VAT
Xero and Sage UK monthly and 24-month prices shown both excluding and including VAT at 20%, verified 31 July 2026
Plan Monthly ex VAT Monthly inc VAT (20%) 24 months ex VAT 24 months inc VAT (20%)
Xero Ignite
quoted ex VAT by Xero		 £16.00 £19.20 £307.20 £368.64
Sage Accounting Start
quoted as £18+VAT by Sage		 £18.00 £21.60 £378.00 £453.60
Difference, Sage minus Xero £2.00/mo £2.40/mo £70.80 £84.96
Sage Sole Trader
quoted as £7+VAT		 £7.00 £8.40 £147.00 £176.40
Sage Sole Trader Free
5 invoices/month, non-VAT only		 £0.00 £0.00 £0.00 £0.00
Sage Accounting Standard
quoted as £39+VAT		 £39.00 £46.80 £819.00 £982.80
Sage Accounting Plus
quoted as £59+VAT		 £59.00 £70.80 £1,239.00 £1,486.80
Xero Grow £37.00 £44.40 £710.40 £852.48
Xero Comprehensive £50.00 £60.00 £960.00 £1,152.00
Xero Ultimate £65.00 £78.00 £1,248.00 £1,497.60

Amber marks the cheaper side of each pairing on the like-for-like ex-VAT basis. The inc-VAT columns are shaded because they are the secondary view: they are what actually leaves your bank account, and they are the numbers that matter if you are not VAT-registered and therefore cannot reclaim any of it. 24-month totals apply each vendor’s current promotion — Xero 80% off six months, Sage three months free — before VAT is added, which is how HMRC and both vendors treat it.

If you are VAT-registered

Use the ex-VAT columns and ignore the shaded ones. You reclaim the VAT on your software on your next return, so the real cost of Sage Accounting Start is £378 over two years and Xero Ignite is £307.20. Xero is £70.80 cheaper.

If you are not VAT-registered

Use the shaded inc-VAT columns, because you cannot reclaim any of it. Sage Accounting Start really costs you £453.60 over two years against Xero’s £368.64 — a gap of £84.96, not the £70.80 the ex-VAT view suggests.

Why we normalise to ex VAT anyway

Because it is the only basis on which both vendors’ own numbers are comparable, and because it is how the two sibling pages on this site are priced. Quietly setting Sage’s £18+VAT against Xero’s £16 ex VAT would flatter Sage by £3.60 a month. That is exactly the trick this site exists to call out.

Side by side

The full comparison

Amber marks the winner of each row, whichever side it falls on. Count them — Xero takes more, but Sage takes the two that decide the cheapest bill for a lot of small UK businesses.

Feature and price comparison of Xero and Sage in the UK, verified 31 July 2026, all prices ex VAT
  Xero Sage
Entry price / month, ex VAT £16
Ignite		 £0 Sole Trader Free, or £7 Sole Trader
£18 Accounting Start once you need VAT
How the price is quoted Ex VAT, and it says so “+VAT” — the same basis, but the headline is not your bill. £18+VAT is £21.60 out of your account
Genuinely free tier No. 30-day trial plus one free month, then you pay Yes — Sole Trader Free, £0 forever. Capped at 5 invoices a month and non-VAT only
we earn nothing from it and it is the second section of this page
Current intro offer 80% off 6 months
→ £3.20/mo, then £16 — a 400% step up		 3 months free
simpler, and easier to reason about than a taper
24-month cost, VAT-registered entry plan £307.20
£70.80 cheaper · £368.64 inc VAT		 £378 Accounting Start
£453.60 inc VAT
24-month cost, non-VAT sole trader £307.20 Ignite
no cheaper tier exists		 £147 Sole Trader — or £0 free tier
£160.20 cheaper, and we are paid less for it
VAT returns (MTD for VAT) Yes, on the £16 entry plan and every plan above it Only from Accounting Start, £18. Neither Sole Trader tier files VAT
MTD for Income Tax Recognised by HMRC Recognised by HMRC
Invoice limits 20/month on Ignite, unlimited from Grow (£37)
a real cap, and the jump out of it is expensive		 5/month on the free tier — a hard ceiling. No cap on any paid tier, including the £7 one
Payroll Included for 5 people from Comprehensive, £50 — one subscription, one bill Deep RTI payroll heritage and a strong product, but not included in any Accounting tier — Sage Payroll is a separate subscription priced by employee band
Bank feeds The strongest part of the product. Open Banking across the UK, and a reconciliation engine that learns your coding Open Banking feeds that work, with a rules engine that needs more hand-holding and re-authorises more often
Third-party app ecosystem Largest in the UK — 1,000+ integrations, and the ones that matter are first-class A much thinner marketplace. The essentials are covered; anything niche probably is not. Check your stack before you migrate
Interface Modern, fast, and the mobile app is genuinely usable Dated. Sage Accounting has improved but still feels like desktop software wearing a browser. Sole Trader is the cleanest thing Sage ships
UK accountant familiarity The default in cloud-first and younger practices, and effectively universal among them Forty years of UK practice history. Older and long-established firms often still run Sage-native workflows — ask yours before you decide
Brand trust Well known, but a 2006 New Zealand start-up in UK terms A FTSE 100 British company that has been in UK accounting since the 1980s. For some readers that matters more than any feature
Support Email / in-product, 24/7. No inbound phone line Phone support on paid plans during UK hours, plus a large partner network
Users included Unlimited on every plan Single user on Start; multi-user from Standard (£39)
Free trial 30 days + 1 month free Free tier instead of a trial on Sole Trader; 30 days on Accounting
Plan ladder, ex VAT £16 → £37 → £50 → £65 £0 → £7 → £18 → £39 → £59
more rungs, and the bottom two are far below anything Xero sells
Best suited to VAT-registered sole traders and small limited companies, anyone who needs payroll in one bill, anyone with a real app stack Very small non-VAT businesses, anyone whose accountant is a long-standing Sage practice, anyone who wants a free tier rather than a trial

All prices ex VAT, taken from Xero’s and Sage’s own UK pricing pages on 31 July 2026. Sage’s pages quote “+VAT”; those figures are the ex-VAT prices and are used here unchanged, with the inc-VAT equivalents in the VAT section above. Promotional rates are for new customers only and do not renew. Counted honestly, Xero takes more amber cells — but Sage takes the free tier and the £7 tier, and for a business that fits either of those, nothing in Xero’s column is worth £307.20.

Start Xero free — 30 days + 1 month → See Sage plans — 3 months free →
Who should pick which

Four businesses, four different answers

There is no universal winner here. There is only a winner for your specific circumstances, and in two of these four cases it is not the product we earn most from.

Micro / side business · 5 invoices a month, no VAT

Sage, free, and we earn nothing

No commission to us Sage Sole Trader Free costs £0 permanently. Five invoices a month, no VAT returns, and that is the whole restriction. Over 24 months you pay nothing against £307.20 for Xero Ignite. Check your busiest month against the five-invoice ceiling first — if you clear it, this is the cheapest legitimate route to compliant books in the UK, and we are paid nothing for pointing at it.

Verdict Sage Sole Trader Free, £0/mo

Check the 5-invoice ceiling →

Non-VAT sole trader · more than 5 invoices

Sage, by £160.20

Sage Sole Trader at £7+VAT is £147 over 24 months ex VAT, or £176.40 inc VAT. Xero has nothing below Ignite, so its number is £307.20. There is no feature Xero puts on Ignite that is worth £160.20 to a sole trader who is not VAT-registered. The honest caveat: Sage Sole Trader cannot file VAT, so if you expect to register inside two years, price from Accounting Start instead.

Verdict Sage Sole Trader, £7/mo

See Sage Sole Trader →

VAT-registered sole trader or small company

Xero, by £70.80

Xero Ignite files MTD VAT on the £16 entry plan. Sage makes you climb to Accounting Start at £18 for the same thing. Over 24 months that is £307.20 against £378 ex VAT — and £368.64 against £453.60 if you cannot reclaim. Xero also gives you unlimited users where Sage Start gives you one. The catch is Ignite’s 20-invoice monthly cap: clear that and Xero Grow is £710.40, at which point Sage wins on price by a distance.

Verdict Xero Ignite, £16/mo

Start Xero free →

Limited company running payroll

Xero, on the total bill

Xero Comprehensive at £50 bundles payroll for five people — £960 over 24 months, one subscription. Sage Accounting Standard is £819 ex VAT, which looks cheaper until you notice that no Sage Accounting tier includes payroll: Sage Payroll is a separate subscription on top. Inc VAT, Sage Standard is already £982.80 against Xero’s £1,152 — before payroll. Sage’s payroll product is excellent and its RTI heritage is real; it is just not in the price you are being shown.

Verdict Xero Comprehensive, £50/mo

Start Xero free →

Both products, unvarnished

What each one gets right, and what irritates us

We have run a VAT-registered limited company on Xero for four years and kept a Sage Accounting subscription alongside it for eighteen months. The complaints below are ours, not a competitor’s marketing.

Xero

What Xero gets right

  • MTD VAT is on the £16 entry plan. Sage makes you pay £18 for it. Over two years that is £307.20 against £378 ex VAT, and Xero is the cheaper of the two for anyone VAT-registered.
  • Bank reconciliation is the best in class. The suggested-match engine learns your coding fast and the feeds stay connected. Sage’s work, but you will re-authorise more often and correct more guesses.
  • The app ecosystem is in a different league. Over a thousand integrations. Sage’s marketplace covers the essentials and thins out fast beyond them.
  • Payroll is inside one subscription. Comprehensive at £50 covers five people. With Sage you buy Accounting and Payroll separately and reconcile two bills.
  • Unlimited users on every plan, including the £16 one. Sage Accounting Start is single-user; you pay £39 for Standard to add anyone, including your bookkeeper.
  • The interface does not fight you. This sounds soft until you have spent a quarter in both. Xero is quicker to learn and quicker to use, and the mobile app is not an afterthought.

What genuinely annoys us about Xero

  • There is no free tier, at any volume, ever. Sage will keep a five-invoice non-VAT business running for £0 forever. Xero’s answer to that business is £307.20 over two years, and we are paid for that answer.
  • Nothing exists below £16. Sage sells a £7 Sole Trader tier. For a non-VAT sole trader that is £147 against £307.20 — Xero is more than twice the price for a job neither product finds difficult.
  • Twenty invoices a month on Ignite. A low cap, easy to hit, and crossing it means £37 on Grow — a 131% jump to £710.40 over two years. Sage removes the cap at £7.
  • The 80%-off taper is designed to be forgotten. £3.20 for six months then £16 is a 400% step-up on a bill you have stopped watching. Sage’s three-months-free is a blunter and more honest offer.
  • No inbound phone support. Email and in-product only. Sage will put a human on a phone during UK hours.

Sage

What Sage gets right

  • A free tier that is genuinely free. Sole Trader Free, £0, no expiry, no card. Five invoices a month and no VAT, but for a side business that is a complete answer — and no competitor in this comparison has one.
  • £7 undercuts everything Xero sells. The paid Sole Trader tier removes the invoice ceiling for £147 over two years. Xero’s cheapest possible answer is £307.20.
  • Forty years of UK accountancy behind it. A FTSE 100 British company that older practices have used since before cloud accounting existed. If your accountant is one of them, that familiarity is worth more than any feature list.
  • Payroll heritage that is not marketing. Sage Payroll is a serious RTI product used by a large slice of UK payroll bureaux. It is sold separately, but it is very good.
  • Three months free is a simpler promotion. No taper, no percentage, no cliff in month seven — you know exactly when you start paying and exactly what you start paying.
  • More rungs on the ladder. £0, £7, £18, £39, £59. You are less likely to be paying for a tier you do not need.

What genuinely annoys us about Sage

  • The “+VAT” pricing makes it look cheaper than it is. £18+VAT is £21.60 leaving your account. It is the same ex-VAT basis Xero uses, but the label invites you to compare the wrong numbers, and plenty of comparison pages oblige.
  • The free tier’s five-invoice ceiling is easy to hit. Four retainers and one ad-hoc job and you are done for the month. It is a real product, but it is a smaller one than the word “free” makes it sound.
  • The interface is dated. Sage Accounting still carries desktop-era navigation and it takes longer to do ordinary things. After four years in Xero, going back to it feels like work.
  • The app ecosystem is thin. Nothing close to Xero’s thousand-plus. Check your receipt capture, your payment processor and your EPOS are on the list before you migrate, not after.
  • Neither Sole Trader tier files a VAT return. Register for VAT and the £0 and £7 plans both stop being options. That is a migration, not an upgrade path you will enjoy.
  • Payroll is a second subscription. Xero puts it in one bill at £50. With Sage you are buying two products and the advertised Accounting price is not your total cost.
The bit affiliates skip

Don’t buy Xero if…

We are paid more when you choose Xero, and paid nothing at all in the first case below. Here are the five situations where you should not buy it.

  • You send five invoices a month or fewer and you are not VAT-registered. This is the big one. Sage Sole Trader Free is £0 forever and it is not a trial. Xero is asking £307.20 over two years for a job you can have done for nothing. Check the five-invoice ceiling →
  • You are a non-VAT sole trader with more than five invoices a month. Sage Sole Trader is £7+VAT — £147 over 24 months against Xero’s £307.20. Xero has nothing to sell you at that price and no feature on Ignite closes a £160.20 gap. Go to Sage →
  • You are VAT-registered and send more than twenty invoices a month. You outgrow Xero Ignite’s cap and land on Grow at £710.40 over two years. Sage Accounting Start has no invoice ceiling and costs £378. That is £332.40 in Sage’s favour and it is not close.
  • Your accountant is a long-standing Sage practice. Sage has been in UK accountancy for forty years and plenty of established firms still work Sage-first. The friction of overruling them costs more than the £70.80 that separates these products. Ask before you subscribe.
  • You want the simpler promotion. If you know you will forget to re-check the bill, three months free at Sage is easier to live with than 80% off six months followed by a 400% step-up in month seven.

Weighing Xero against a different rival? We ran the same two-year arithmetic on Xero vs QuickBooks and on Xero vs FreeAgent — FreeAgent is the other one with a £0 route, if you bank with NatWest, RBS, Ulster Bank or Mettle.

Footnote

Show your working

Every figure on this page comes from the same sum: the promotional months at their promotional rate, then list price for the rest. Xero’s offer is 80% off for six months. Sage’s is three months at £0 followed by list. Nothing is rounded, nothing is estimated, and the inc-VAT column is the ex-VAT total multiplied by 1.2.

Arithmetic behind every cost figure on this page, ex VAT with the inc-VAT equivalent at 20%
Plan (list price ex VAT) Months 1–6 Months 7–12 Year one Months 13–24 24-month total, ex VAT 24-month total, inc VAT
Xero Ignite £16 6 × £3.20 = £19.206 × £16 = £96£115.2012 × £16 = £192£307.20£307.20 × 1.2 = £368.64
Xero Grow £37 6 × £7.40 = £44.406 × £37 = £222£266.4012 × £37 = £444£710.40£710.40 × 1.2 = £852.48
Xero Comprehensive £50 6 × £10 = £606 × £50 = £300£36012 × £50 = £600£960£960 × 1.2 = £1,152
Xero Ultimate £65 6 × £13 = £786 × £65 = £390£46812 × £65 = £780£1,248£1,248 × 1.2 = £1,497.60
Sage Sole Trader Free £0 6 × £0 = £06 × £0 = £0£012 × £0 = £0£0£0 × 1.2 = £0
Sage Sole Trader £7+VAT (3 × £0) + (3 × £7) = £216 × £7 = £42£6312 × £7 = £84£147£147 × 1.2 = £176.40
Sage Accounting Start £18+VAT (3 × £0) + (3 × £18) = £546 × £18 = £108£16212 × £18 = £216£378£378 × 1.2 = £453.60
Sage Accounting Standard £39+VAT (3 × £0) + (3 × £39) = £1176 × £39 = £234£35112 × £39 = £468£819£819 × 1.2 = £982.80
Sage Accounting Plus £59+VAT (3 × £0) + (3 × £59) = £1776 × £59 = £354£53112 × £59 = £708£1,239£1,239 × 1.2 = £1,486.80

The five numbers that matter

  • £378 − £307.20 = £70.80. What Sage Accounting Start costs a VAT-registered business over two years above Xero Ignite, ex VAT. Xero wins this one, and it is a real win.
  • £307.20 − £147 = £160.20. What Xero costs a non-VAT sole trader above Sage’s £7 Sole Trader tier. Sage wins by more than twice the margin Xero won above, and we are paid less for saying so.
  • £307.20 − £0 = £307.20. What Xero costs a five-invoice non-VAT business that could have had Sage Sole Trader Free for nothing. We earn no commission on the £0 route and it is still the second section of this page.
  • £453.60 − £368.64 = £84.96. The same Xero-versus-Sage entry comparison for a reader who cannot reclaim VAT. Both totals rise by 20%; the gap widens from £70.80 to £84.96.
  • £710.40 − £378 = £332.40. What a VAT-registered business sending more than twenty invoices a month pays extra to be on Xero Grow rather than Sage Accounting Start. The largest single gap on this page, and it goes to Sage.

Assumptions, stated plainly. All headline figures are ex VAT and in GBP, which is the only like-for-like basis: Sage quotes its UK prices as “+VAT” and Xero quotes ex VAT, so the ex-VAT number is the same kind of number on both sides. The inc-VAT column applies UK VAT at the standard 20% rate to the ex-VAT total — it is what leaves your bank account, and it is the column to use if you are not VAT-registered and cannot reclaim it. Monthly billing, no annual prepayment discount applied. Xero’s 80% six-month new-customer discount and Sage’s three-months-free offer are verified on the entry plans and applied on the same terms to higher tiers for illustration — confirm the offer on the tier you actually want before you buy. Free-trial months are excluded from every total, which makes both products look slightly more expensive than they will be in your first year, Xero more so because its trial is longer. Sage payroll is not included in any Accounting figure above, because Sage sells it as a separate subscription; Xero Comprehensive at £50 does include payroll for five people. Promotions are for new customers only, do not renew, and change monthly. Everything here was checked against Xero’s and Sage’s own UK pricing pages on 31 July 2026.

How this page was researched

Our method · verified 31 July 2026

Every price on this page was read off Xero’s and Sage’s own UK pricing pages — not a press release, not a review-site database, not another comparison article. Figures are ex VAT unless this page says otherwise, cover the plans named in the tables 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 on this page monthly and move the verification date when we do. Sage publishes its UK prices with a “+VAT” suffix and Xero publishes its ex VAT, so every headline figure here is normalised to ex VAT with the inc-VAT equivalent printed alongside.

The 24-month totals are arithmetic rather than opinion: 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 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 page is written and maintained by Fizoral as a publication. If a number here is wrong it is checkable against the vendor’s own page in under a minute — and we would rather you did that than took our word for it. Read how we research, or tell us about a figure that looks wrong.

Questions we actually get

Before you commit

Is Sage’s Sole Trader Free plan really free, or is it a trial?

It is genuinely free, and it is not a trial. Sage Sole Trader Free costs £0 a month for as long as you use it, with no card required and no expiry date. The catch is written into the plan rather than hidden in the terms: you can send a maximum of five invoices a month, and it does not handle VAT, so the moment you register for VAT you have to move. It is a real product for a real audience — a weekend business, a first year of self-employment, a handful of monthly retainers. We earn no commission at all when you take it, and we have put it in the first paragraph of this page anyway, because £0 beats £307.20.

Why does Sage look cheaper than Xero when it isn’t?

Because Sage advertises £18+VAT and Xero advertises £16, and that plus-VAT suffix does a lot of quiet work. Normalised properly — both ex VAT, which is the only like-for-like basis — Sage Accounting Start is £18 a month against Xero Ignite’s £16, so Xero is £2 a month and £70.80 over 24 months cheaper. What the +VAT label hides is that Sage’s advertised number is not your bill: £21.60 a month is. Xero’s £16 is also an ex-VAT figure and becomes £19.20, so if you are not VAT-registered and cannot reclaim any of it, the real gap is £2.40 a month and £84.96 over two years. Xero is the cheaper of the two at entry level either way. The point is that neither headline is the number that leaves your account, and Sage’s understates itself by £3.60 a month.

How many invoices does Sage’s free plan allow, and what happens if I go over?

Five a month, and the software stops you at the sixth rather than billing you for it. There is no overage charge and no silent upgrade — you are asked to move to a paid plan. Five is less generous than it sounds once you count properly: a consultant billing four retainer clients plus one ad-hoc job is already at the ceiling, and anyone invoicing per job rather than per month will pass it in the first busy week. Count your worst month, not your average one. If that number is six or more, the free plan is not a free plan for you, it is a two-month plan.

Can Sage Sole Trader handle VAT returns and Making Tax Digital?

No. Both the free and the £7 Sole Trader tiers are built for non-VAT-registered sole traders and do not file MTD VAT returns. For VAT you need Sage Accounting Start at £18+VAT, which is £21.60 a month inclusive and £378 over 24 months ex VAT. Xero includes MTD VAT on its entry Ignite plan at £16, which is £307.20 over the same 24 months. So the moment VAT registration enters the picture, Sage’s cheap tiers stop being relevant and Xero becomes the cheaper of the two by £70.80. If you expect to cross the VAT threshold inside two years, price the comparison from Sage Accounting Start, not from £7.

Do UK accountants prefer Xero or Sage?

It splits by the age of the practice, and it matters more than any feature on this page. Sage has been in UK accountancy since the 1980s and long-established firms often still run Sage-native workflows, so if your accountant is an older practice, Sage may be what they know best. Younger and cloud-first practices are overwhelmingly on Xero, which has become the default in UK bookkeeping over the past decade. Neither answer is universally right. Ask your accountant before you subscribe, because the friction of overruling them costs more, every time, than the £70.80 that separates these two products over two years.

What will Xero and Sage actually cost me over 24 months?

On entry plans, ex VAT: Xero Ignite is £307.20 and Sage Accounting Start is £378, so Xero is £70.80 cheaper. Inclusive of VAT, Sage Accounting Start is £453.60. But entry plan is not the same as right plan. If you are not VAT-registered, Sage Sole Trader at £7+VAT costs £147 over 24 months and beats Xero by £160.20, and Sage Sole Trader Free costs nothing at all if you send five invoices a month or fewer. If you are VAT-registered and send more than twenty invoices a month you outgrow Xero Ignite and need Grow at £710.40, at which point Sage Accounting Start at £378 is far cheaper. The full arithmetic for all eleven plan combinations is in the working table on this page.

Take the trial that fits your answer

Thirty days is enough to reconcile a full VAT quarter and find out whether the bank feed actually handles your account — the only test that really matters. Both links below are affiliate links, and we have given you the case for each. If you send five invoices a month and are not VAT-registered, ignore both and take Sage Sole Trader Free instead.

Start Xero free — 30 days + 1 month → See Sage plans — 3 months free →

Both are affiliate links. We earn a commission if you subscribe and you pay exactly the same either way. We earn nothing from Sage’s free tier and recommend it first regardless. Xero prices are ex VAT; Sage prices are quoted “+VAT” and are shown here ex VAT with the inc-VAT equivalent alongside. Verified 31 July 2026; promotions change monthly, so confirm on the vendor’s page before you commit.

Xero £307.20 · Sage Start £378 · Sage Free £0Over 24 months, entry plans, ex VAT
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