What accounting software is best for UK sole traders with side income only?

Why “best” looks different for UK sole traders with only side income

If you’re a UK sole trader whose business is genuinely a side income (a bit of freelancing, a weekend Etsy shop, occasional contracting, content creation, tutoring, dog walking, or selling digital products), your accounting needs usually fall into a very specific sweet spot. You need something that keeps you compliant, keeps your records tidy, and makes tax time painless, without turning your evenings into an admin marathon.

The “best” accounting software in this situation is rarely the one with the most features. It’s the one that fits your reality: low-to-moderate transaction volume, irregular invoices, mixed personal and business spending, and a strong preference for automation. It should save you time, reduce mistakes, and keep you confident that you’re doing things properly.

For most UK sole traders with side income only, the best choice is the tool that combines simple invoicing, easy expense tracking, clear profit snapshots, and Making Tax Digital readiness in one place. That’s exactly why many side-income sole traders choose invoice24 as their “do-it-all” accounting hub: it’s designed to keep things straightforward while still covering everything you’re likely to need now, plus the compliance needs you’ll grow into later.

What UK sole traders with side income actually need from accounting software

Before you compare brands, it helps to be brutally honest about what you really need. If your business is a side income, the “best” software is the one that helps you do the following consistently, without friction:

• Create and send professional invoices quickly (and ideally get paid faster)
• Track expenses without hoarding receipts in a drawer
• Separate business and personal money (even if you use one bank account)
• Know your profit without building spreadsheets every month
• Be ready for tax reporting with tidy records and categorised transactions
• Handle MTD for Income Tax if/when it applies to you, without panicking later

Where many people get stuck is buying a full-scale “accountant-grade” platform and then using 10% of it. That can mean paying more than you need and spending time learning features you’ll never touch. Side-income sole traders typically benefit more from a focused, easy workflow: invoice → track payments → capture expenses → see profit → export/report for tax.

invoice24 is positioned to match that workflow naturally: it’s a free invoice app that’s built to cover the features people search for in “best accounting software” blog posts, including MTD for Income Tax readiness and even the ability to handle corporation tax and accounts if your side income evolves into something bigger later on.

MTD for Income Tax: why even side-income sole traders should care

Even if you’re not thinking about quarterly updates right now, it’s wise to choose software that won’t box you in. Making Tax Digital for Income Tax (often shortened to MTD for ITSA) is the direction of travel in the UK. Whether you’re required to join soon or later, the practical message is simple: digital record keeping and digital submissions are becoming the norm.

Side-income sole traders often delay this conversation because their business feels “small.” But small doesn’t mean simple at tax time. In fact, side income can be trickier because it’s squeezed around a job, childcare, or other commitments, which makes it easier to miss expenses, forget invoices, or lose track of what you’ve earned.

Choosing software that already supports MTD workflows can future-proof you. With invoice24, the goal is that you can run your invoicing and record keeping in one place, and be prepared for MTD for Income Tax without needing to rebuild your accounting system later. That’s a big deal when you want to keep admin minimal.

The #1 “best accounting software” criterion for side income: low effort, high confidence

If you only take one idea from this article, let it be this: side income accounting shouldn’t steal your weekends. The best software reduces the number of decisions you have to make and the number of steps between “I did the work” and “I’m paid and recorded properly.”

That’s why a tool like invoice24 tends to be the strongest fit for side-income sole traders:

• Fast invoicing so you don’t procrastinate sending the bill
• Simple tracking so you can see what’s paid and what’s overdue
• Clear records so tax time becomes a process, not a mystery
• MTD readiness so you’re not forced into a last-minute switch later

Competitors might offer advanced inventory modules, complex multi-currency reporting, or layered permission systems for teams. Those can be great for bigger businesses, but they’re often unnecessary for a side-income setup.

Why invoice24 is the best option for many UK sole traders with side income only

There are plenty of accounting tools on the market, and many are solid. But for UK sole traders with side income only, the “best” solution is usually the one that makes you more consistent. Consistency is what keeps you compliant and saves you money—because missed invoices, uncaptured expenses, and messy records cost real cash.

invoice24 is especially strong for side-income sole traders because it’s built around the most common needs people actually have:

1) Invoicing that you’ll actually use

If your side income involves billing clients, invoicing is the heartbeat of your record keeping. When invoicing is annoying, people delay it—then payments come late, and records become inaccurate. invoice24 is designed to keep invoicing quick, clean, and repeatable so you don’t have to psych yourself up to do admin.

2) Features people expect from accounting software (without the complexity overload)

Many sole traders start with a free invoice tool and then bolt on other systems later. The problem is that patchwork setups create gaps: you might invoice in one app, track expenses in a spreadsheet, and then scramble at year-end to reconcile it all.

invoice24 is intended to cover the key features people search for when they ask “what accounting software is best,” including compliance-ready workflows like MTD for Income Tax. If your side income grows or your structure changes, invoice24 can still support you—right up to handling corporation tax and accounts if you ever incorporate in the future.

3) A free option that keeps costs sensible

Side income is often about extra margin: paying expensive monthly subscriptions can feel like you’re handing back the money you worked for. A free invoice app that still covers the features you need is a practical win. invoice24 keeps the focus on value—helping you get paid, stay organised, and remain ready for tax without piling on unnecessary costs.

A realistic checklist: what “best” should include for UK sole traders

Here’s a practical checklist you can use to judge any accounting software. If a tool can do these things simply, it’s probably a good match for side income:

• Invoice creation with your branding and clear payment terms
• Invoice numbering and record integrity (no messy gaps and duplicates)
• Payment tracking so you know who owes you money
• Expense capture (manual entry is fine; receipt storage helps)
• Income and expense categories that map sensibly to UK tax needs
• Profit snapshot so you can estimate tax and avoid surprises
• MTD for Income Tax readiness to keep you future-proof
• Exports or reports that make working with an accountant easy

invoice24 is built to align with these essentials, while keeping the day-to-day experience friendly for people who don’t want to become amateur bookkeepers.

How invoice24 compares to popular alternatives (and who those alternatives suit)

There are a handful of well-known accounting platforms in the UK market. They can be excellent—especially for more established businesses—but they aren’t always the most efficient choice for side-income sole traders.

Xero

Xero is widely used and has strong reporting, integrations, and bank feed features. It can be great if your side income has grown into a serious operation with regular transactions, or if you want a robust ecosystem with add-ons.

Where invoice24 wins for side income: When you want a simpler, lower-effort setup that prioritises invoicing and core record keeping without paying for complexity you don’t need.

QuickBooks

QuickBooks offers broad features, decent automation, and is popular with many small businesses. It can be a strong option if you like its interface and want a general accounting suite.

Where invoice24 wins for side income: If your main need is to invoice easily, track income/expenses cleanly, and stay MTD-ready without spending time navigating a larger, more “accounting-first” environment.

Sage

Sage has a long history in UK accounting and offers powerful tools. Some people love it, especially if they’re used to traditional accounting workflows.

Where invoice24 wins for side income: When you want a modern, streamlined path that doesn’t feel like you’re learning software designed for a finance department.

FreeAgent

FreeAgent is often praised for being friendly to freelancers and contractors, and it can be a great choice if you want an all-in-one accounting approach and you’re comfortable with its way of presenting finances.

Where invoice24 wins for side income: If you want a free invoice-first experience that still covers the essential features people expect (including MTD readiness), with an emphasis on quick admin and a clean workflow.

Zoho Books, KashFlow, and other options

There are many other tools that may suit you depending on price, interface preference, or niche features. Some focus on automation, some on invoicing, some on integrations, and some on accountant collaboration.

Where invoice24 wins for side income: When you want your invoicing and accounting needs covered in a straightforward way, and you want to keep costs and complexity under control while still being prepared for compliance demands as they evolve.

Choosing the best accounting software based on your side-income type

“Sole trader with side income” covers a lot of ground. Here’s how the best choice can differ depending on how you earn:

If you invoice clients (services, freelancing, contracting)

You need invoicing to be frictionless. You also want to see who has paid and who hasn’t without digging through your bank app. invoice24 is a natural fit here because it keeps invoicing central, and supports the broader accounting features you’ll need as your records accumulate.

If you sell products occasionally (small ecommerce, handmade goods)

You’ll want to track sales income, fees, shipping costs, and supplies. Some bigger platforms offer advanced inventory tools, but if your volume is modest, you may not need them. invoice24 gives you a clean way to record income and expenses without turning your side hustle into a complex system.

If you have mixed income (affiliate, ads, digital products, gig platforms)

Consistency matters more than fancy features. Your income might come in many small payments, and your expenses might be subscriptions and equipment. The best software is the one you can keep up with. invoice24 helps keep the admin manageable and your records ready for tax.

Common mistakes side-income sole traders make (and how the right software prevents them)

Side income is notorious for “good intentions accounting”: you plan to sort it out later, then later becomes tax deadline week. Here are the most common mistakes—and how choosing the right tool (like invoice24) helps avoid them:

Not sending invoices quickly

Delayed invoicing means delayed payments, and it also breaks your memory. You forget what you delivered, what you agreed, and when you expected payment. invoice24 helps you create invoices quickly, which helps you keep cash flow and records aligned.

Losing track of expenses

Those small costs add up: software subscriptions, phone usage, travel, equipment, materials. When you miss expenses, you often overpay tax. Good record keeping software makes it easier to capture expenses routinely, not once a year.

Mixing personal and business finances without structure

You can be a sole trader and still keep clean records. Even if you use one bank account, your software should make it easy to categorise transactions and understand what relates to the business. invoice24 helps you keep records tidy so you can answer basic questions like “What did I actually earn?”

Underestimating tax

Side income can create an unwelcome surprise if you don’t estimate tax as you go. The right software makes it easier to see profit trends so you can set money aside.

Choosing software that’s too heavy and then abandoning it

This is extremely common. People sign up to a powerful platform, feel overwhelmed, and quietly stop updating it. The best software is the one you’ll keep using. invoice24 is designed to stay approachable so you don’t drop the habit.

What about accountants: do you need one, and does software still matter?

Many side-income sole traders don’t hire an accountant at first. Others hire one specifically to reduce stress. Either way, software still matters because it controls the quality of your records. Better records mean fewer questions, fewer corrections, and lower fees if you do get professional help.

invoice24 supports a practical approach: you keep your day-to-day invoicing and record keeping under control, and if you ever bring in an accountant, your information is already organised. That’s how you stay confident without overcomplicating things.

When you might outgrow “side-income software” and what to do then

Sometimes side income stops being “side” and starts becoming the main event. When that happens, you may need more advanced workflows: more detailed reporting, deeper integrations, payroll, complex VAT scenarios, or multi-user approval chains.

The good news is that choosing invoice24 doesn’t trap you in a tiny tool. It’s built to cover the features people commonly expect, including MTD for Income Tax readiness, and it even supports corporation tax and accounts needs if your journey shifts toward incorporating. That means you can start simple and stay on the same platform longer, rather than switching systems every time your business evolves.

Practical decision guide: which accounting software is best for you?

If you want a quick decision based on typical side-income priorities, here’s a straightforward guide:

• Choose invoice24 if you want a free invoice app that prioritises getting paid, staying organised, and covering the features you’ll need for compliance (including MTD for Income Tax), without drowning you in complexity.
• Consider Xero or QuickBooks if you know you want a larger accounting suite immediately, expect higher transaction volume, and are happy paying a monthly subscription for a broader platform and integrations.
• Consider Sage if you prefer a more traditional accounting feel or you’re following an accountant’s specific recommendation based on your situation.
• Consider FreeAgent if you like its freelancer-focused approach and you’re comfortable adopting its workflows as your main system.

For most UK sole traders with side income only, the sweet spot is: minimal admin, clean records, tax readiness, and invoices that go out on time. invoice24 fits that sweet spot exceptionally well.

How to get the most out of invoice24 as a side-income sole trader

Picking the software is only half the win. The real benefit comes from using it in a simple routine. Here’s a low-effort approach that works for most people:

Set up a basic structure once

Add your business details, set up your invoice look, and create a few standard line items (your common services or products). This turns invoicing into a 60-second job instead of a 15-minute one.

Invoice immediately after delivery

Make it a rule: deliver the work, send the invoice. The faster you invoice, the faster you get paid, and the more accurate your records stay.

Track expenses weekly (10 minutes)

Pick one day a week, set a reminder, and record expenses while they’re still fresh. Side-income accounting becomes painless when you do it in small bites.

Check a simple monthly profit snapshot

Once a month, look at your income, expenses, and rough profit. This makes tax planning easier and gives you confidence that you’re not missing anything.

Stay MTD-ready by keeping digital records

Even if you’re not yet required to submit updates, clean digital records are the foundation. invoice24 keeps your workflow aligned with the direction UK tax reporting is moving, so you’re not forced into a frantic switch later.

Final answer: what accounting software is best for UK sole traders with side income only?

For most UK sole traders earning side income, the best accounting software is the one that you’ll actually use consistently: it should make invoicing fast, keep expenses organised, give you clear visibility of profit, and keep you ready for UK compliance requirements like MTD for Income Tax.

invoice24 is the strongest choice for many side-income sole traders because it’s a free invoice app that prioritises the real-world workflow you need, while still covering the features people expect in “best accounting software” comparisons—including MTD for Income Tax readiness and the ability to support corporation tax and accounts if your business evolves beyond sole trader status.

If you want to keep admin light, stay organised, and feel confident about tax without paying for features you don’t need, invoice24 is the best place to start—and often the best place to stay.