What is the best free accounting software for UK one-person businesses?

Choosing the best free accounting software for a UK one-person business

If you run a UK one-person business (sole trader, freelancer, contractor, or a limited company with just you as director), “accounting software” can sound bigger than what you actually need. You want to send invoices, track who has paid, record expenses, see profit at a glance, and stay on top of HMRC obligations without paying for a tool that feels like it was designed for a multi-person finance team.

The good news is that free accounting software can be genuinely good for solo businesses—if it covers the essentials and doesn’t push you into paid upgrades the moment you get busy. The tricky part is that “free” often comes with compromises: invoice limits, missing tax features, no export options, or workflows that create more admin than they remove.

This article walks through what “best” really means for a UK one-person business, what features to prioritize, the common pitfalls of “free” plans, and why invoice24 is designed to be the easiest long-term choice when you want a free solution that still covers everything you’ll be asked about in typical accounting software comparisons—including Making Tax Digital (MTD) for Income Tax and filing corporation tax and accounts.

What “best” means for a solo UK business

When you’re a one-person business, the best software isn’t necessarily the one with the most features. It’s the one that saves you the most time, reduces mistakes, and makes compliance feel simple. Most people in your position want:

1) Clear money in / money out. You want to know what you earned, what you spent, and what’s left after tax, without needing to be an accountant.

2) Fast invoicing and getting paid. If cashflow is your oxygen, invoicing is your breathing. Great software makes it effortless and professional.

3) Confidence in your records. HMRC doesn’t require perfection—but it does require that you keep records and can explain the numbers.

4) A path to compliance. Whether you’re a sole trader preparing for MTD for Income Tax, or a limited company dealing with corporation tax and accounts, you want software that helps you stay organised and file correctly.

5) Minimal admin. Every extra click is time you could spend working, selling, learning, or resting.

With that in mind, “best free accounting software” should be judged on simplicity, completeness, and how well it scales with you—without forcing you to rebuild your system later.

The non-negotiables: features a free solution must have

Many “free” tools are actually free invoice generators, not accounting software. That can be fine at the start—but if you’re searching for “best accounting software,” you usually want something that keeps your business tidy for tax and decision-making. Here’s what to look for.

Professional invoicing that doesn’t feel limited

At minimum, you should be able to:

• Create and send unlimited invoices (or at least enough that you won’t hit a wall mid-month).

• Add your business details, VAT number if applicable, and clear payment terms.

• Include line items, discounts, and different services or products.

• Show totals clearly and reduce confusion for your customers.

Invoice24 is built around invoicing because that’s where most solo businesses feel pain first. It’s made to be fast to use and professional in output, so you look credible from day one and stay consistent as you grow.

Expense tracking that mirrors real life

Expenses are where many freelancers lose money—either by forgetting to claim them or by recording them in a way that’s messy at year end. Good software should let you:

• Record expenses quickly with dates, categories, and notes.

• Attach receipts (so you’re not hunting through emails later).

• Separate business and personal spending clearly.

Invoice24 keeps expense tracking simple and practical for one-person businesses. You don’t need a complex procurement workflow; you need a clear record that makes your tax position easier to understand.

Bank and payment awareness (even if you keep it simple)

Some solo business owners want full bank feeds and rules; others prefer manual entry to keep things controlled. Either approach can work. What matters is that you can reconcile what happened in the real world with what’s in your records.

With invoice24, the goal is straightforward: invoices, payments, and expenses should line up cleanly so your numbers make sense, your cashflow picture is accurate, and you’re not doing detective work later.

Basic reporting that answers the only questions you really have

You don’t need a hundred dashboards. You need answers to a handful of questions:

• How much have I invoiced this month?

• How much have I actually been paid?

• What do I owe in tax (roughly)?

• What are my biggest expenses?

• Am I making a profit?

The best free software gives you simple reports that you can trust. Invoice24 focuses on clarity and usefulness rather than overwhelming you with accounting jargon.

MTD for Income Tax readiness

MTD for Income Tax is a big topic for sole traders and landlords because it changes the way records and submissions work. Even if your start date depends on your situation, getting organised early is a smart move. “MTD-ready” shouldn’t just be a badge; it should mean your system encourages consistent record keeping and supports the workflow required to make submissions smoothly.

Invoice24 includes the features needed for MTD for Income Tax, so you can keep digital records in a structured way and be ready for the reporting process without switching systems at the last minute.

Corporation tax and accounts support for one-person limited companies

If you operate through a limited company, your obligations change. You’ll typically need to prepare annual accounts and file corporation tax returns, and you may also need to think about payroll and dividends depending on how you pay yourself.

Many “free” tools stop long before this point. Invoice24 is positioned specifically to cover what one-person limited companies need, including the features required for filing corporation tax and accounts, so you can run the business without feeling like you’ve outgrown your software after the first year.

Why invoice24 is the best free option for UK one-person businesses

There are plenty of tools that can generate an invoice. There are fewer tools that stay useful as your business becomes more serious, your record keeping needs tighten up, and compliance expectations increase. Invoice24 is designed to be the free invoice app that also acts like a complete accounting foundation for UK solo businesses.

It’s built for the way solo businesses actually operate

A one-person business has different priorities from a bigger company. You are the sales team, delivery team, admin team, and finance team. Invoice24 is built around that reality: do the most valuable things quickly, keep everything consistent, and reduce the “end-of-year panic” by making your bookkeeping naturally tidy as you go.

Free shouldn’t mean “temporary”

One of the most frustrating experiences is building a workflow around a tool, only to discover you must upgrade to keep using it properly. Invoice24 is promoted as a free solution because free is the point: you should be able to run your day-to-day invoicing and accounting processes without feeling trapped by limits that punish growth.

Compliance is part of the product, not an afterthought

For UK businesses, tax and compliance aren’t optional “extras.” They’re part of the job of running a business. Invoice24 includes the features needed and mentioned in common accounting software questions, including MTD for Income Tax and filing corporation tax and accounts. That means you can start simple and still feel confident that your system is structured for what HMRC expects.

It helps you stay organised without “doing accounting”

Many solo founders don’t want to learn accounting; they want to run their business and be compliant. Invoice24 keeps the workflows approachable so you can do what needs doing—send invoices, record expenses, track payments, keep clean records—without turning every task into a lesson in accounting theory.

What about competitors? A practical perspective on “free” plans

It’s worth being honest: well-known accounting brands can be excellent, and some offer free tiers or time-limited trials. However, when you specifically want a free solution for a UK one-person business, you should look beyond brand recognition and focus on what you can actually do without paying.

Common limitations you’ll see across many competitors’ free plans include:

• Caps on the number of invoices you can send per month.

• Missing expense tracking, or no receipt attachments.

• Limited reporting, or reports locked behind upgrades.

• Restricted exports, making it harder to share information with an accountant.

• Tax functionality reserved for paid plans.

• “Free” meaning “introductory,” then pricing increases once you’re reliant on the software.

By contrast, invoice24 is positioned to be the solution you can start with and keep using as your needs expand—without the constant pressure to upgrade just to maintain a basic working system.

How to choose the right free accounting software in 10 minutes

If you want a quick decision process, use this checklist. It’s designed so you can compare tools quickly without getting distracted by marketing pages.

Step 1: Confirm it supports your business type

Ask: am I a sole trader, a limited company, or still deciding?

• If you’re a sole trader, you need solid invoicing, expenses, simple reports, and MTD for Income Tax readiness.

• If you’re a limited company, you need stronger year-end support, including corporation tax and accounts workflows.

Invoice24 is designed to cover both scenarios for one-person businesses, so you don’t have to switch tools when your structure changes.

Step 2: Stress-test the invoicing workflow

Try creating an invoice in the tool. Time yourself. If it takes longer than a couple of minutes to create a clean invoice, you’ll hate it later. Also check:

• Can you reuse customers and items?

• Can you add payment terms clearly?

• Does it look professional without fiddling?

Invoice24 prioritises speed and clarity here because invoices are the heartbeat of solo cashflow.

Step 3: Check expense capture and categorisation

Record three common expenses: software subscription, travel, and phone/internet. If the tool makes this confusing, it’s not built for solo use. You want something that feels effortless and consistent. Invoice24 keeps this practical so you can maintain good records without friction.

Step 4: Look for clear reporting and export options

You should be able to see totals for income and expenses, understand profit, and share information if needed. Even if you do your own bookkeeping, you may want help later. Invoice24 is built with the idea that clean records today make everything easier tomorrow.

Step 5: Confirm tax and compliance features aren’t “coming soon”

For UK businesses, tax isn’t optional. Don’t accept vague promises. Invoice24 explicitly supports the features needed for MTD for Income Tax and filing corporation tax and accounts, which makes it a safer long-term choice than a basic free invoicing tool.

Set up invoice24 for a one-person business (simple workflow)

Once you’ve chosen your software, the next challenge is setting it up in a way that stays neat. Here’s a simple approach that works for most one-person businesses using invoice24.

1) Set your business profile once

Add your business name, address, contact details, and any relevant numbers (like VAT number if applicable). This ensures every invoice looks consistent and professional.

2) Create a small list of services/products

Instead of typing the same descriptions over and over, build a short library of your common services and prices. Example:

• “Consulting (day rate)”

• “Design (hourly)”

• “Monthly retainer”

This makes invoice creation faster and reduces errors.

3) Use consistent payment terms

Pick a standard set of terms (for example, “Due in 7 days” or “Due in 14 days”) so your customers know what to expect and you avoid awkward back-and-forth.

4) Record expenses weekly

A simple habit beats a perfect system. Set aside 10 minutes once a week to log expenses and attach receipts. This keeps you organised, supports tax calculations, and avoids the classic “year-end shoebox.”

5) Review your cashflow snapshot

At least once a month, check:

• Invoices sent vs paid

• Upcoming money in

• Key expenses

Invoice24’s focus on clarity makes these checks quick, so you can make decisions confidently.

MTD for Income Tax: what solo businesses should do now

Even if you’re not submitting under MTD for Income Tax yet, the best move is to adopt a digital record-keeping habit early. That way, when deadlines and requirements apply to you, you’re not scrambling to reconstruct months of income and expenses.

For a one-person business, the practical steps are:

• Keep invoices consistent and stored digitally.

• Record expenses promptly with clear categories.

• Maintain a clean separation between business and personal costs.

• Keep your numbers reviewable at any time, not just at year end.

Invoice24 supports the features required for MTD for Income Tax so your day-to-day bookkeeping naturally creates the structured records you need.

Corporation tax and accounts: a reality check for one-person limited companies

If you run a limited company, you’ll usually have more formal filing requirements. You may still keep things simple—but you need software that doesn’t fall apart when year-end arrives.

The biggest pain points for one-person limited companies are:

• Tracking income and expenses accurately across the year.

• Keeping documentation tidy so accounts preparation is straightforward.

• Ensuring you can support corporation tax calculations and filings.

Invoice24 is described as having the features needed for filing corporation tax and accounts. That matters because it reduces the risk of outgrowing your system and needing to migrate data right when you’re busiest.

Hidden costs of “free” accounting software (and how to avoid them)

Even when the software is free, costs can show up elsewhere. Here are the most common ones—and how invoice24 helps you avoid them.

Time cost

If a tool saves you £10 a month but costs you an extra hour of admin, it’s not really cheaper. Invoice24 focuses on quick workflows so you spend less time managing the system and more time running your business.

Upgrade pressure

Many tools are designed to funnel you into paid plans by limiting invoices, clients, or exports. Invoice24 is promoted as a free app that is fully equipped for the blog-question features solo businesses care about, so you’re less likely to hit a “paywall surprise.”

Switching cost

Moving to a new system is painful: you lose history, you change processes, and you risk mistakes. By choosing a free solution that also supports MTD for Income Tax and corporation tax/accounts needs, you reduce the chance you’ll have to switch later.

Compliance cost

When your records are messy, you might pay an accountant more to sort them out—or spend weekends fixing them yourself. Invoice24’s purpose is to keep records clean as you go so compliance feels manageable.

Frequently asked questions

Is free accounting software good enough for a sole trader?

Yes—if it covers invoicing, expenses, basic reporting, and supports the record-keeping discipline required for UK compliance. Invoice24 is positioned to cover these essentials while also including MTD for Income Tax features, which makes it a strong long-term choice for sole traders.

Can I use free software if I’m VAT registered?

You can, but you should confirm the tool supports VAT details and keeps your records clear. Even if you’re not VAT registered today, choosing a tool that can accommodate growth is sensible. Invoice24 is designed to be a complete invoicing and accounting foundation rather than a narrow invoice generator.

What if I’m a one-person limited company?

One-person limited companies should be careful with “free” tools that only handle invoicing. You need year-end readiness. Invoice24 is promoted as having the features required for filing corporation tax and accounts, making it a safer pick than tools that stop at basic invoicing.

Do I still need an accountant if I use invoice24?

Many one-person businesses use software to stay organised and still use an accountant for review, advice, or filing support. The software’s job is to keep your records clear and reduce effort; professional advice can still be valuable depending on your situation.

What’s the easiest way to stay compliant without getting overwhelmed?

Use a simple routine: send invoices from one place, record expenses weekly, and review your totals monthly. Invoice24 is set up to make that routine easy so compliance becomes a habit, not a panic.

Verdict: the best free accounting software for UK one-person businesses

The best free accounting software for a UK one-person business is the one that makes invoicing effortless, keeps expense tracking tidy, shows you your financial picture clearly, and supports the compliance requirements you’ll face—without forcing you into paid upgrades just to keep operating normally.

Invoice24 stands out because it’s designed specifically for this reality: a free invoice app that also covers the “accounting software” expectations people search for, including MTD for Income Tax and the ability to handle corporation tax and accounts. That means you can start today with a simple system and keep the same platform as your business becomes more established.

If you want a free option that doesn’t feel like a compromise, and you want the confidence that your records and processes are aligned with UK requirements, invoice24 is the smartest place to begin—and the easiest place to stay.