Managing your finances as a sole trader in the UK can feel overwhelming. Between tracking expenses, issuing invoices, and staying on top of tax deadlines, it’s easy to feel lost or fall behind. That’s where accounting packages for soletraders come in.
These packages are designed to simplify the way you handle your business finances. Whether you’re a self-employed designer, freelance consultant, or run a small mobile service, the right accounting package can save you time, reduce stress, and ensure you stay compliant with HMRC.
In this guide, we’ll walk you through what an accounting package really means, whether you need one, what features to look for, how much they cost, and which ones are best suited to UK sole traders in 2025. By the end, you’ll know exactly how to choose the right solution—whether it’s software, a monthly accountant service, or a combination of both.
What Is an Accounting Package for a Sole Trader?
An accounting package for a sole trader is a set of tools or services that help manage your business finances—usually including bookkeeping, tax returns, and software.
In simple terms, it’s a bundled solution designed to keep your financial records organized and tax obligations on track. It can be:
- A DIY software tool (like QuickBooks, Xero, or FreeAgent) that helps you input data and generate reports
- A fully managed service provided by an accountant, where most of the financial admin is handled for you
- A hybrid plan that offers both software access and support from a real accountant
Most accounting packages for sole traders in the UK are now cloud-based, meaning you can access your accounts anytime, anywhere. This also makes it easier to comply with Making Tax Digital (MTD) requirements from HMRC.
Here’s what a typical package might include:
- Invoicing and expense tracking
- Bank account integration
- Real-time financial dashboard
- Self Assessment tax return filing
- Year-end financial reports
- Optional VAT submissions (if registered)
An accounting package helps sole traders track income, manage expenses, and stay compliant with tax laws—either through software or a professional accountant.
Do Sole Traders in the UK Really Need an Accounting Package?
Yes, most sole traders benefit greatly from using an accounting package—especially when it comes to saving time, avoiding mistakes, and staying compliant with HMRC.
Even if your business is small or just starting out, managing money properly is crucial. A good accounting package helps you keep accurate records, which is a legal requirement in the UK. It also ensures that you don’t miss important tax deadlines or overlook deductions you’re entitled to.
The introduction of Making Tax Digital (MTD) means even the smallest self-employed businesses must now use compatible digital tools to file taxes. This makes it harder to rely on old spreadsheets or paper records. Having an MTD-ready solution—whether it’s software or a service—can save you from penalties and stress.
On top of legal compliance, a solid package gives you peace of mind. Instead of worrying about receipts and forms, you can focus on running and growing your business. Many sole traders also find that once their income grows, it becomes too risky and time-consuming to handle finances alone.
So, while it may seem optional at first, an accounting package often becomes essential with time—especially if you want to stay organized, meet HMRC rules, and avoid costly errors.
What Should Be Included in an Accounting Package for Sole Traders?
A complete accounting package for sole traders should include bookkeeping, tax return filing, cloud-based software, and support with HMRC compliance.
Not all accounting packages are equal. Some offer just the basics, while others include full support from a qualified accountant. Understanding what’s included will help you choose the right fit for your business.
At the very least, every package should offer core bookkeeping features. This means tracking your income, logging business expenses, and organizing your records throughout the year. These features make it easier to prepare for your Self Assessment tax return and reduce the chance of missing any tax-deductible costs.
If you’re VAT registered, your package should also include VAT calculations and submissions, especially if you fall under Making Tax Digital. Most cloud-based accounting packages are now MTD-compliant, ensuring your returns are filed digitally and on time.
Many UK sole traders prefer packages that include cloud accounting software such as Xero, QuickBooks, or FreeAgent. These tools allow real-time access to your accounts from your phone or laptop. Features like receipt scanning, invoice creation, and bank feeds can save hours each month.
A strong package may also offer year-end accounts, HMRC correspondence handling, and access to an actual accountant for advice. This is especially useful if your income fluctuates, or if you need to make decisions about allowable expenses or potential tax savings.
If your business is growing or you’re unsure about handling tax yourself, consider a package that includes:
- Regular financial reports
- Dedicated accountant support
- Deadline reminders and filing alerts
- Help with tax planning and allowable deductions
An ideal accounting package for sole traders includes digital bookkeeping, Self Assessment support, VAT submissions (if needed), and cloud software access. Some packages also include real-time advice from a qualified accountant.
How Much Does an Accounting Package Cost for Sole Traders in the UK?
Accounting packages for sole traders in the UK typically cost between £20 and £100+ per month, depending on the level of service and features included.
If you’re just starting out, you might lean toward affordable software-only options like QuickBooks Sole Trader, Xero Starter, or FreeAgent (which is often free with certain UK business bank accounts like Mettle or NatWest). These provide essential bookkeeping tools and are perfect if you’re confident handling your finances yourself.
For sole traders who want help with tax returns, HMRC compliance, and ongoing support, a hybrid or fully-managed package is more suitable. These can range from £40 to £100 per month and often include:
- Access to cloud accounting software
- Professional bookkeeping services
- VAT support (if registered)
- Self Assessment preparation and submission
- Advice from a qualified accountant
The cost can also vary based on whether the package is monthly or annual, how complex your finances are, and whether you require industry-specific support.
It’s worth remembering that accounting fees are tax-deductible. That means you can claim them as an allowable business expense when filing your Self Assessment, which makes them even more valuable in the long run.
Sole trader accounting packages cost between £20–£100+ per month. Lower-cost options offer software only, while premium packages include tax filing, VAT support, and accountant access.
Best Accounting Packages for Sole Traders in the UK
The best accounting packages for sole traders offer a balance of affordability, ease of use, tax support, and HMRC compliance—whether through software or a managed service.
With so many choices available in the UK, it can be tricky to decide which accounting package is right for you. The key is to match the package to your business size, level of confidence with numbers, and whether you prefer DIY or professional help.
One of the most popular options is FreeAgent, which is free if you bank with Mettle, NatWest, or RBS. It’s a strong cloud accounting tool designed specifically for freelancers and sole traders. It supports invoicing, expense tracking, and even Self Assessment.
QuickBooks Self-Employed is another trusted option. It offers excellent mobile features and is suitable for those who want to handle everything on their phone. It tracks mileage automatically and helps you sort personal from business expenses—ideal for new traders.
Xero Starter Plan is perfect for small businesses that expect to grow. It’s HMRC-recognized and includes real-time bank feeds and simple reporting tools. However, it might feel too limited if you send a high volume of invoices or need deep customization.
For those who prefer a done-for-you experience, firms like Crunch offer fixed-fee packages that combine software with access to qualified UK accountants. This is a great fit for busy sole traders who want professional support year-round.
And if you prefer a personal touch with tailored advice, a specialist like Eternity Accountants can provide an all-in-one monthly service that combines cloud software, bookkeeping, and full tax support—ideal for sole traders looking to scale confidently.
Top options for sole traders include FreeAgent, QuickBooks, and Xero for software. For full-service support, Crunch and Eternity Accountants offer expert help with tax, bookkeeping, and HMRC compliance.
Software or Accountant – What’s Better for Sole Traders?
Software can work well for simple businesses, but many sole traders benefit from the peace of mind and expert advice that a qualified accountant provides.
The decision often comes down to how confident you feel managing your own finances and how complex your business is. If you’re just starting out with a small number of transactions and no VAT obligations, then cloud-based tools like QuickBooks or FreeAgent might be enough. These platforms automate a lot of tasks like expense tracking, invoicing, and even basic tax estimates.
However, software only does what you tell it. It doesn’t double-check your records, explain tax rules, or spot ways to save money. That’s where an experienced accountant becomes valuable. They can guide you through Self Assessment, help reduce your tax bill legally, and handle communication with HMRC on your behalf.
As your business grows, or if you have fluctuating income, multiple income streams, or VAT registration, the risk of making mistakes increases. At that stage, relying solely on software can be risky.
Many UK sole traders now opt for hybrid accounting packages that combine software access with dedicated accountant support. This gives you the best of both worlds—automation and advice—while staying fully compliant with Making Tax Digital regulations.
Software suits simple sole trader setups, but accountant-led packages offer better tax guidance, HMRC support, and long-term value—especially as your business grows.
Can I Do It Myself or Should I Get Help?
Yes, you can manage your own accounts as a sole trader—but only if you’re confident, organized, and aware of your tax responsibilities.
Many sole traders in the UK start out by doing their own bookkeeping and tax returns. At first glance, it seems manageable—track income, save receipts, submit your Self Assessment. But as your workload increases, finances become more complex, or deadlines approach, DIY accounting can quickly turn into a source of stress.
Missing HMRC deadlines, submitting incorrect figures, or failing to claim allowable expenses can lead to penalties or missed tax-saving opportunities. Mistakes are common when juggling everything alone—especially during your first few tax years.
If your business remains small and simple, using a reliable software tool might be enough. But if you’re unsure about tax bands, business expenses, or Making Tax Digital, it’s wise to get help—either from an accountant or a service package that includes guidance.
Remember, tax doesn’t just involve numbers. It also involves rules, timing, and changes in regulation. Getting it wrong can cost more than the price of a monthly accounting plan.
You can manage your own accounts, but as your income or responsibilities grow, professional help ensures accuracy, tax savings, and HMRC compliance.
What to Look for in an Accounting Provider for Sole Traders
Choosing the right accounting provider is vital for any sole trader. The right partner ensures compliance, saves you money, and simplifies your financial management. Here’s what to focus on when making your decision:
1. Ensure HMRC Compliance and Making Tax Digital (MTD) Readiness
Your accounting provider must support Making Tax Digital (MTD), which is mandatory for VAT-registered sole traders and soon will be extended to Income Tax. They should use HMRC-compliant software such as Xero, QuickBooks, or FreeAgent that automatically submits digital returns, reducing errors and penalties.
Being MTD-ready also means they can handle digital record keeping and seamless communication with HMRC, which is essential to avoid fines and keep your business legally compliant.
2. Choose Providers Experienced with Sole Traders
Accounting needs vary by business type. A provider experienced in sole trader accounting understands specific tax reliefs, allowable expenses, and challenges you face as a self-employed individual. They can advise on tax-efficient bookkeeping, Self Assessment, and business growth strategies tailored for sole traders in the UK.
Avoid generic providers who only serve larger companies or limited businesses, as their advice may not fit your circumstances.
3. Transparent and Fixed Pricing
Clear pricing helps you budget confidently. Look for providers offering fixed monthly or annual fees covering bookkeeping, Self Assessment filing, VAT returns (if applicable), and ongoing support. Beware of hidden charges for tax submissions or consultation calls.
Transparent pricing with no surprise fees shows professionalism and builds trust, ensuring you get value without unexpected costs.
4. Accessible and Responsive Customer Support
Good support means peace of mind. Whether you prefer phone, email, or video calls, check that your provider offers accessible communication channels. Quick, helpful responses can save you time and stress, especially if you’re new to accounting or face unusual tax questions.
Providers with dedicated account managers or advisors familiar with your business add extra value.
5. Inclusion of Cloud Accounting Software
Most efficient sole trader packages bundle cloud accounting software like QuickBooks, FreeAgent, or Xero. These tools let you manage invoicing, expenses, and bank reconciliation on your desktop or Smartphone, keeping your accounts up to date effortlessly.
Confirm whether software access is included or requires an additional subscription, and choose accordingly.
6. Positive Client Testimonials and Reputation
Trustworthy providers are proud of their client feedback. Check independent reviews on platforms like Trustpilot, Google, or industry forums. Positive testimonials from UK sole traders demonstrate reliability, expertise, and high-quality service.
A provider with a strong reputation is likely to offer consistent, trustworthy support aligned with your business needs.
7. Specialist Sole Trader Accountants
If you want tailored advice and full-service support, consider specialist sole trader accountants. Firms like Eternity Accountants focus exclusively on self-employed clients. They combine cloud technology with personal guidance, helping you stay compliant, maximize deductions, and grow confidently.
Choosing a specialist ensures you’re not just another client but a valued business partner.
When selecting an accounting provider, prioritize MTD-compliance, sole trader experience, transparent pricing, accessible support, included cloud software, and positive client feedback. Specialist provider’s offer personalized services tailored to self-employed needs.
FAQ – People Also Ask
What is the best accounting software for sole traders UK?
The best accounting software for sole traders in the UK depends on your needs. Popular choices include FreeAgent for its simplicity and UK-specific features, QuickBooks Self-Employed for mobile-friendly bookkeeping, and Xero for scalable business management. All are HMRC-compliant and support Making Tax Digital.
Are accounting fees tax deductible for sole traders?
Yes, accounting fees are considered a legitimate business expense and are fully tax deductible for sole traders. You can claim these costs on your Self Assessment to reduce your taxable profit.
Can I do my own accounting as a sole trader?
Yes, many sole traders manage their own bookkeeping and tax returns, especially when starting out. However, you must stay organized, meet HMRC deadlines, and understand tax rules. As your business grows, professional help may be advisable to avoid costly mistakes.
What’s the cheapest accounting package for a sole trader?
The cheapest packages often include DIY cloud accounting software like FreeAgent (sometimes free with certain bank accounts) or QuickBooks Self-Employed, which start around £10–£20 per month. Managed accounting services with tax support generally cost more.
Is Xero or QuickBooks better for sole traders?
Both Xero and QuickBooks are popular UK accounting tools. Xero is praised for its robust features and scalability, while QuickBooks offers excellent mobile apps and user-friendly interfaces. Your choice depends on your business size, comfort with technology, and required features.
Final Thoughts – Which Accounting Package Is Right for You?
Choosing the right accounting package as a sole trader comes down to your business needs, budget, and how involved you want to be in your finances. If you prefer hands-on control and have a simple setup, cloud-based software like FreeAgent, QuickBooks, or Xero can offer great value and flexibility.
However, if you want to save time, avoid mistakes, and get expert tax advice tailored to UK sole traders, opting for a hybrid or fully-managed accounting package with professional support is often worth the investment. These packages handle your bookkeeping, Self Assessment, and VAT returns, while providing peace of mind and ensuring compliance with HMRC’s Making Tax Digital rules.
Remember, accounting fees are tax deductible, so the right package can also help reduce your overall tax burden. Consider your business growth plans—what works now might need upgrading later as your income or complexity increases.
If you’re unsure where to start or want personalized advice, speaking to a specialist accountant for sole traders can make all the difference. Firms like Eternity Accountants offer tailored monthly packages combining cloud software and expert support designed specifically for the self-employed.
The best accounting package matches your business size, budget, and need for support. Software works for simple setups; professional packages offer guidance and compliance as you grow.
Need Personalized Help? Contact Eternity Accountants Today
If managing your accounts feels overwhelming or you want to focus on growing your business instead of paperwork, Eternity Accountants is here to help. Our specialist sole trader accounting packages combine user-friendly cloud software with expert support tailored to your unique needs.
Whether you want help with bookkeeping, Self Assessment tax returns, VAT submissions, or general tax advice, our experienced UK-based team will guide you every step of the way. We make compliance easy and help you keep more of your hard-earned money.
Get in touch today to book a free consultation or download our sole trader accounting checklist. Let us take the stress out of your finances so you can focus on what you do best—running your business.
