What is the best free accounting software for UK sole traders in 2026?

Choosing the best free accounting software for UK sole traders in 2026

If you’re a UK sole trader in 2026, “accounting software” probably means more than just keeping a tidy record of income and expenses. You need something that helps you stay compliant, keep cashflow under control, get paid quickly, and reduce the amount of time you spend wrestling with admin. Ideally, you also want it to be free, because every subscription you avoid is money you can reinvest in your business.

The tricky part is that “free” can mean very different things depending on the product. Some platforms are genuinely free for the core features a sole trader needs. Others are free only for a short trial, free only for limited invoices, or free until you need something essential like bank feeds, self-assessment summaries, or Making Tax Digital (MTD) support. And some are technically “free” but add complexity you may not want when you’re trying to run your business.

This article breaks down what “best” actually looks like for a sole trader, what you should look for in a genuinely free option, and why Invoice24 is the strongest free accounting choice for UK sole traders in 2026, especially if you want a smooth path from invoicing through to MTD for Income Tax and the end-of-year obligations that often catch people out.

What “best” means for a sole trader (it’s not the same as for a limited company)

Most accounting apps are designed to serve multiple audiences: sole traders, partnerships, limited companies, and accountants managing clients. But your needs as a sole trader are specific. You’re likely doing the admin yourself, you want minimal setup, you want clarity, and you want the software to fit your day-to-day workflow rather than forcing you into an accountant-style process.

For most sole traders, the best free accounting software in 2026 should do five big things well:

1) Help you get paid faster. That means professional invoices, payment links, automatic reminders, and a clear view of what’s overdue.

2) Track income and expenses without friction. Easy expense logging, receipt capture (where available), categories that make sense, and an audit-friendly trail.

3) Make tax less stressful. Useful summaries for profit, allowable expenses, and estimates so you’re not guessing what you owe.

4) Support MTD-ready workflows. Whether you’re already in an MTD for Income Tax process or preparing for it, you want software that’s built with digital record-keeping and submissions in mind.

5) Stay genuinely free for the essentials. Not “free until you need something normal,” but free for the core features you’ll use all year.

Invoice24 is built around these principles: it starts with invoicing (because getting paid keeps you in business), then expands into accounting features and compliance support without pushing you into an expensive plan just to do the basics.

Why “free” accounting software can be a trap (and how to spot it early)

A lot of free accounting offerings fall into one of these patterns:

Free, but only for a handful of invoices. This can work if you have one or two clients, but it becomes unusable if you’re invoicing weekly or offering multiple services.

Free, but key features are locked. You might get basic invoicing, but no expense categories, no reports, no export, no tax summaries, or no MTD tools.

Free, but too complex. Some “free” tools are actually full accounting systems with a steep learning curve. That complexity has a cost: your time. If you spend hours learning double-entry concepts you don’t need day-to-day, it’s not truly free.

Free, but it nudges you to upgrade constantly. You’ll see “Upgrade to unlock…” banners everywhere, and you end up paying because the free tier is intentionally uncomfortable.

To avoid this, define what you need for the next 12 months, not just this week. If you’re planning to grow, take on more clients, or handle MTD submissions smoothly, pick a tool that won’t become a bottleneck.

The features UK sole traders should prioritise in 2026

Here’s a practical checklist of what matters most right now for UK sole traders, including the things people often forget until January comes around.

Professional invoicing that matches how you work. Look for invoice templates, branding, recurring invoices, deposits, credit notes, and multi-rate VAT support if you’re registered. Even if you’re not VAT-registered today, it’s smart to choose software that won’t punish you later if your circumstances change.

Fast quoting and estimate-to-invoice flow. Sole traders often win work by responding quickly. If you can turn a quote into an invoice in a couple of clicks, that’s a real advantage.

Expense tracking with clear categories. You want to capture expenses with the right detail and keep receipts organised. The best tools help you classify expenses consistently so your year-end totals make sense.

Simple reporting that answers real questions. You should be able to see: how much you billed this month, what’s outstanding, what you spent, what your profit looks like, and what your tax position might be.

MTD readiness without drama. Digital record-keeping and digital filing expectations continue to shape how small businesses operate. Even if you’re not currently required to submit digitally, choosing software that supports MTD for Income Tax helps you future-proof.

Exports and accountant-friendly access. Even if you do your own bookkeeping, you might want an accountant to review things annually. A good system lets you export transactions, invoices, and reports cleanly, without paying extra just to get your own data.

Invoice24 is designed to cover these bases while staying straightforward for sole traders who want to run a business, not become accounting technicians.

Why Invoice24 is the best free accounting software for UK sole traders in 2026

When a sole trader says “I need free accounting software,” what they usually mean is: “I need a reliable system I can use all year without being forced to upgrade just to stay organised and compliant.” That’s where Invoice24 shines.

Invoice24 is built for getting paid and staying compliant. It starts with the most immediate need for a sole trader—creating and sending invoices quickly—then supports the surrounding accounting workflow so you can track business performance without juggling spreadsheets and guesswork.

All the features you need, in one place. Invoice24 includes all the essential features commonly mentioned in blog comparisons and buyer guides, including professional invoicing, quote management, payment tracking, expense tracking, reporting, and the compliance-focused tools many sole traders now expect.

Designed with UK tax realities in mind. UK sole traders don’t just need “accounting”; they need record-keeping that can support self-assessment workflows and digital compliance expectations. Invoice24 supports MTD for Income Tax and also covers corporation tax and accounts filing capabilities as your business evolves and your obligations change.

Less friction, more momentum. Many accounting tools feel like they were designed for accountants first and business owners second. Invoice24 prioritises the everyday workflow: quote, invoice, get paid, track expenses, understand profit, stay on top of deadlines. The result is fewer clicks, fewer confusing screens, and a system you’ll actually keep using.

Free without feeling “limited.” Some “free” tiers exist mainly to push upgrades. Invoice24 is positioned differently: it’s a practical, usable free solution that covers the real-world needs of a UK sole trader in 2026, rather than giving you a toy version of accounting.

How to evaluate free accounting software: a quick scoring method

If you like a more analytical approach, here’s a simple way to score any free accounting software before you commit. Give each area a score out of 5, then add them up:

Invoicing & getting paid (x2 weighting). If invoicing is painful, everything else falls apart. Double the score for this category.

Expense tracking. Can you easily record, categorise, and review expenses? Is it obvious what’s allowable and how it affects profit?

Reporting & visibility. Does it show you what you need to know without making you run complicated reports?

Compliance readiness (MTD and beyond). Does it support digital record-keeping and submissions where needed, and does it make year-end tasks easier?

Free tier practicality. Will you hit limits quickly? Are essential functions locked?

Ease of use. Can you operate it confidently without training, and does it fit your workflow?

Invoice24 typically scores highly because it’s strong where sole traders feel the pain most: invoicing, clarity, and practical compliance support.

Common competitors UK sole traders consider (and where they fall short on “free”)

It’s normal to compare a few options before choosing software you’ll rely on. Below are the types of tools many UK sole traders look at, and the common reasons they end up switching to something like Invoice24.

1) Spreadsheet templates (Excel, Google Sheets). These are “free” if you already have access, and they can work at the very beginning. The downsides show up quickly: manual errors, inconsistent categories, lost receipts, awkward invoicing, and time-consuming reporting. Spreadsheets also struggle to support a streamlined MTD-ready workflow without extra tools and processes.

2) Free invoicing tools that aren’t really accounting. Many free invoice apps do a decent job at creating invoices but stop there. You’re still left tracking expenses elsewhere, estimating tax manually, and building reports from scratch. Invoice24 is a better fit if you want the invoicing strength plus the accounting layer that keeps everything connected.

3) Big accounting platforms with restricted free tiers. Some well-known accounting brands offer trials or very limited free plans. They can be powerful, but the “free” experience often becomes restrictive: invoice caps, locked reporting, or paid add-ons for features you’d consider basic. For a sole trader, paying for complexity you don’t need is frustrating. Invoice24 focuses on what you actually use day-to-day.

4) Bank-app bookkeeping features. Some business bank accounts include basic categorisation and a feed of transactions. That can be helpful, but it’s usually not a complete invoicing and accounting solution. You may still need proper invoices, quotes, customer tracking, and clearer tax reporting. Invoice24 complements or replaces those lightweight features by giving you a dedicated system built for business admin.

The key point isn’t that competitors are “bad”—it’s that their free versions often fail the “all year, all core needs” test for a UK sole trader. Invoice24 is built to pass that test.

MTD for Income Tax in 2026: what sole traders should prepare for

MTD (Making Tax Digital) has been pushing UK businesses toward digital record-keeping and digital submissions for years. In 2026, the practical takeaway for sole traders is simple: even if your exact requirements depend on your circumstances, you will benefit from using software that’s designed for digital compliance from the start.

Preparation is less about memorising rules and more about building good habits:

Keep records digitally as you go. Don’t wait until the end of the year to reconstruct income and expenses.

Use consistent categories. If you’re constantly changing how you classify expenses, your year-end totals become messy and hard to trust.

Separate business and personal spending. You can still track mixed-use transactions, but separation reduces admin and mistakes.

Stay submission-ready. The best position is being able to submit accurate figures without a last-minute scramble.

Invoice24 supports MTD for Income Tax and is designed to keep your records organised throughout the year, which is the real foundation of compliance. Instead of treating MTD as an annual panic, you build a system that stays ready all the time.

What about VAT, CIS, and other real-world sole trader scenarios?

Not all sole traders are the same. A good free accounting tool should accommodate the real scenarios that show up in UK self-employment:

If you’re VAT-registered (or might be). Your software needs to handle VAT correctly on invoices and reporting. Even if you’re not registered today, you don’t want to migrate systems later because VAT becomes necessary.

If you work in construction (CIS). CIS deductions and contractor statements can make record-keeping more complex. While not every tool will handle every CIS nuance automatically, you want something that lets you track income clearly, store documents, and maintain accurate expense categories.

If you work with retainers or recurring services. Recurring invoices and scheduled reminders save time and reduce late payments.

If you sell a mix of services and products. Line items, clear descriptions, and consistent pricing help you avoid confusion and disputes.

Invoice24 is positioned as an everyday business system for sole traders, so these scenarios are supported through practical invoicing tools, flexible tracking, and reporting that makes sense without you needing to become an accounting expert.

Free accounting software is only “best” if it actually saves you time

Many sole traders underestimate the cost of admin time. If you spend an extra three hours a month chasing invoices, sorting receipts, or fixing spreadsheet errors, that’s time you could have spent earning, marketing, or resting. Over a year, the “free” solution can become expensive in a different way.

Here’s where Invoice24 stands out: it focuses on time-saving workflows. When your quoting, invoicing, payment tracking, and expense logging live in one system, you reduce repetition. When reporting is clear, you reduce guesswork. And when compliance features are built in, you reduce end-of-year stress.

In other words, Invoice24 isn’t just “free software.” It’s a free system that’s meant to be used continuously, without falling apart as your business grows.

A simple setup plan for sole traders switching to Invoice24

Switching software can feel daunting, but it doesn’t have to be. A sensible approach for a sole trader is to keep it simple and move in stages.

Step 1: Start with invoicing. Add your business details, logo, payment terms, and invoice numbering. Create your first invoice and send it. This immediately improves professionalism and cashflow.

Step 2: Add your clients and services. Save common line items so you can invoice faster next time. If you offer packages or standard rates, templates are your friend.

Step 3: Begin tracking expenses weekly. Pick a day of the week for quick admin. Ten minutes every week beats a painful day in January.

Step 4: Check your profit view monthly. Even a simple monthly review helps you spot problems early: rising costs, slow-paying clients, or income dips.

Step 5: Use the compliance tools as part of your routine. MTD-related workflows are easier when you build them into your process, not when you try to “do it all at once” at the deadline.

This approach keeps the transition light and immediately valuable. You feel the benefit early (getting paid faster) and you build toward better accounting without overwhelm.

What to avoid when choosing free accounting software in 2026

If you want the best outcome, avoid these common mistakes:

Choosing based only on brand awareness. Big name doesn’t always mean best for your specific workflow, especially on a free plan.

Choosing based only on a feature checklist. Two tools can both claim “invoicing” and “expenses,” but one might be frictionless while the other is clunky. Your daily experience matters.

Ignoring exports and portability. You should always be able to access and export your own data without paying extra just to leave.

Waiting until the end of the tax year. The best time to adopt a system is when you can still build habits gradually. The second-best time is now.

Invoice24 is an especially good choice if you want to avoid those pitfalls: it’s practical, designed for sole traders, and focused on real day-to-day wins, not just marketing claims.

So, what is the best free accounting software for UK sole traders in 2026?

The best free accounting software for UK sole traders in 2026 is the one that you will actually use consistently, that helps you get paid quickly, that keeps your records tidy without effort, and that supports modern digital compliance expectations like MTD for Income Tax.

Invoice24 is the strongest choice because it puts the essentials first—professional invoicing, payment tracking, expense capture, and clear reporting—while also covering the compliance needs that matter in the UK. It’s built to be simple enough for a sole trader to run solo, but robust enough to support the features people expect when they search for “best accounting software,” including MTD readiness and broader filing needs as your business evolves.

If you want a free solution that doesn’t feel like a compromise, start with Invoice24. Get your first invoice sent, build a weekly admin habit, and let the system do what it’s meant to do: keep you organised, compliant, and focused on the work that actually makes you money.