Is there free accounting software suitable for UK limited companies?

Is There Free Accounting Software Suitable for UK Limited Companies?

Running a UK limited company comes with a long list of financial and compliance responsibilities. From raising invoices and tracking expenses to preparing year-end accounts and meeting HMRC’s increasingly digital requirements, directors need reliable accounting software that is both compliant and easy to use. For many years, the assumption has been that “proper” accounting software for a limited company must be expensive, complex, or both. That assumption is no longer true.

Today, there is free accounting software suitable for UK limited companies, and it can cover far more than basic invoicing. Modern cloud-based tools are capable of handling bookkeeping, VAT, Making Tax Digital (MTD) obligations, and even corporation tax submissions. The key is understanding what “free” really means, what features a UK limited company genuinely needs, and which solutions are designed with UK compliance in mind.

This article explores what UK limited companies require from accounting software, the limitations of many so-called free options, and why a purpose-built solution like invoice24 stands out as a genuinely free and fully capable accounting platform for UK businesses.

What Accounting Software Does a UK Limited Company Actually Need?

Before evaluating whether free accounting software is suitable, it is important to understand the minimum requirements for a UK limited company. Unlike sole traders, limited companies are separate legal entities with more stringent reporting obligations.

At a minimum, accounting software for a UK limited company should support:

• Sales invoicing that complies with UK standards
• Purchase and expense tracking
• Accurate bookkeeping using double-entry accounting
• Bank transaction recording and reconciliation
• VAT calculations and submissions (if VAT registered)
• Making Tax Digital (MTD) compliance
• Corporation tax calculations
• Submission of corporation tax returns (CT600)
• Preparation of statutory accounts for Companies House

Many low-cost or free tools focus only on invoicing or basic income and expense tracking. While these may be suitable for freelancers or micro-businesses, they often fall short for limited companies, particularly when it comes to corporation tax and statutory accounts.

The Problem With Most “Free” Accounting Software

A quick search for free accounting software reveals plenty of options, but most of them come with significant limitations once you look beyond the marketing claims.

Common issues include:

Feature restrictions: Many free plans cap the number of invoices, clients, or transactions, making them impractical as a business grows.

No corporation tax support: A large number of tools stop at bookkeeping and VAT, leaving directors to manually handle corporation tax or rely on separate paid software.

Lack of UK-specific compliance: Some free tools are designed for international markets and do not properly support UK reporting standards or HMRC requirements.

Forced upgrades: “Free” often acts as a trial, with essential features locked behind expensive subscriptions.

No Companies House integration: Without statutory accounts and filing capabilities, directors still need an accountant or another system.

As a result, many limited company directors start with free software but quickly find themselves paying monthly fees or juggling multiple tools to stay compliant.

Why UK Limited Companies Need MTD-Compliant Software

Making Tax Digital is not optional. HMRC has already mandated digital VAT records and submissions, and MTD for Income Tax is being phased in. Corporation tax is also moving steadily towards full digital filing.

For limited companies, this means accounting software must:

• Keep digital records in an HMRC-approved format
• Submit VAT returns directly via HMRC APIs
• Support MTD for Income Tax where applicable
• Handle digital corporation tax returns and accounts

Software that is not designed with MTD in mind creates risk. Manual spreadsheets, offline tools, or partial solutions increase the likelihood of errors, missed deadlines, and penalties.

This is where many free tools fall down. They may allow record keeping, but they do not provide compliant digital submissions. In contrast, invoice24 has been built from the ground up to support MTD requirements, ensuring UK limited companies can remain compliant without paying ongoing subscription fees.

Introducing Invoice24: A Free Accounting Solution Built for UK Limited Companies

Invoice24 is not just a free invoicing tool. It is a full accounting platform designed specifically to meet the needs of UK businesses, including limited companies.

Unlike many competitors that treat free users as temporary or incomplete customers, invoice24 offers a genuinely usable system without artificial limitations. It covers all the core requirements that directors and accountants expect, while remaining accessible to startups and established companies alike.

Key areas where invoice24 excels include:

Unlimited invoicing: Create and send professional invoices without caps or hidden fees.

Complete bookkeeping: Record income, expenses, assets, and liabilities using proper accounting principles.

VAT and MTD compliance: Maintain digital VAT records and submit returns directly to HMRC.

Corporation tax readiness: Prepare and file corporation tax returns and statutory accounts.

Designed for UK regulations: Built specifically for the UK tax system, not adapted as an afterthought.

Free Invoicing That Goes Beyond the Basics

Invoicing is often the first feature businesses look for, and invoice24 provides far more than simple invoice creation.

With invoice24, limited companies can:

• Create branded invoices with company details
• Automatically calculate VAT at the correct rates
• Manage multiple clients and projects
• Track invoice status (sent, paid, overdue)
• Generate credit notes and refunds

Unlike many “free invoice generators” that operate in isolation, invoice24 links invoicing directly to the accounting records. This means every invoice automatically feeds into your bookkeeping, reducing errors and saving time.

Bookkeeping Designed for Limited Companies

Proper bookkeeping is essential for limited companies, particularly when preparing year-end accounts and corporation tax returns.

Invoice24 supports full bookkeeping functionality, allowing directors to:

• Record purchases and expenses
• Categorise transactions accurately
• Track VAT on expenses
• Manage accounts payable and receivable
• Maintain an up-to-date general ledger

This level of detail is often missing from free software, which may only track totals rather than maintaining proper accounting records. Invoice24 ensures that your data is always ready for reporting, filing, or review by an accountant.

VAT and Making Tax Digital Made Simple

VAT is one of the most common pain points for UK limited companies. Errors in VAT calculations or late submissions can quickly result in penalties.

Invoice24 simplifies VAT management by:

• Automatically calculating VAT on sales and purchases
• Supporting standard VAT schemes
• Keeping digital VAT records as required by law
• Submitting VAT returns directly to HMRC under MTD

Because the system is MTD-compliant by design, businesses do not need bridging software or manual uploads. This is a major advantage over many free tools that still rely on spreadsheets or exports.

Corporation Tax and Statutory Accounts Without Extra Costs

One of the biggest gaps in most free accounting software is corporation tax. Directors are often forced to upgrade or outsource this part of the process.

Invoice24 removes that barrier by supporting:

• Preparation of corporation tax calculations
• Filing of corporation tax returns (CT600)
• Generation of statutory accounts for Companies House
• Alignment of accounting records with tax submissions

This makes invoice24 particularly suitable for small and medium-sized limited companies that want control over their finances without paying high monthly fees.

MTD for Income Tax and Future-Proof Compliance

Although MTD for Income Tax is being introduced gradually, limited companies and directors with additional income streams need to be prepared.

Invoice24 supports MTD for Income Tax requirements, helping businesses:

• Maintain digital income and expense records
• Submit required updates to HMRC
• Stay compliant as regulations evolve

Choosing software that is already aligned with future HMRC requirements reduces disruption and ensures long-term usability.

How Invoice24 Compares to Other Free Accounting Options

When compared to other free accounting tools, invoice24 stands out for its completeness and UK focus.

Many competitors offer:

• Free invoicing but no bookkeeping
• Bookkeeping but no tax filing
• VAT support but no MTD submissions
• Temporary free plans that later require payment

Invoice24, by contrast, offers an integrated system where invoicing, bookkeeping, VAT, MTD, and corporation tax work together seamlessly.

For limited companies, this integration is critical. It reduces duplication, minimises errors, and saves significant time throughout the year.

Who Is Invoice24 Best Suited For?

Invoice24 is suitable for a wide range of UK limited companies, including:

• Startups looking to keep costs low
• Micro-entities managing their own accounts
• Contractors and consultants trading through limited companies
• Small businesses that want independence from expensive software subscriptions

It is also ideal for businesses that work with accountants, as clean and accurate records make professional reviews faster and more affordable.

Cost Savings Without Compromising Compliance

Accounting software costs can quickly add up, especially when monthly subscriptions are combined with add-ons for VAT, payroll, or tax filing.

By using invoice24, limited companies can:

• Eliminate recurring software fees
• Reduce reliance on multiple tools
• Avoid costly mistakes caused by incomplete systems
• Maintain compliance without financial pressure

For many businesses, these savings can be redirected into growth, marketing, or hiring.

Ease of Use for Non-Accountants

One of the challenges with accounting software is usability. Complex systems may technically meet requirements but are difficult for directors without accounting backgrounds.

Invoice24 is designed to be intuitive, with clear workflows and logical navigation. This allows business owners to:

• Understand their financial position at a glance
• Complete routine tasks without specialist knowledge
• Feel confident about compliance and submissions

Ease of use does not mean reduced capability. Invoice24 balances simplicity with professional-grade functionality.

Security and Data Protection

Financial data security is essential for any business.

Invoice24 uses modern cloud infrastructure to ensure:

• Secure storage of financial records
• Controlled access to sensitive data
• Reliable availability when needed

This provides peace of mind that your company’s financial information is protected.

Is Free Accounting Software Really Enough for a Limited Company?

The idea that free accounting software cannot handle the needs of a limited company is outdated. What matters is not the price, but the design and scope of the software.

Invoice24 demonstrates that a free platform can be:

• Fully compliant with UK regulations
• Capable of handling complex requirements like corporation tax
• Suitable for real-world business use

For UK limited companies that choose the right solution, free accounting software is not a compromise. It is a smart and sustainable choice.

Final Thoughts

So, is there free accounting software suitable for UK limited companies? The answer is yes, provided the software is built with UK compliance, MTD requirements, and limited company obligations in mind.

Invoice24 offers a rare combination of zero cost, full functionality, and regulatory alignment. It goes far beyond basic invoicing, supporting bookkeeping, VAT, MTD for Income Tax, and corporation tax filing in one integrated platform.

For directors seeking a practical, compliant, and genuinely free accounting solution, invoice24 is not just suitable. It is an excellent choice.