Xero pricing UK: every plan and what you need for MTD (October 2026)
We read every price on Xero's own UK pricing page on 9 October 2026, then checked what Xero does for Making Tax Digital for Income Tax in HMRC's software list. No estimates: where the page is unclear, we say so.
All Xero plans and prices
| Plan | Price a month | First 6 months | With VAT (20%) | First 12 months* | What you get |
|---|---|---|---|---|---|
| SimpleNon-VAT-registered sole traders and landlords | £7 + VAT | £0.70 + VAT | £8.40 | £46.20 + VAT | Quotes and 10 invoices · Bank reconciliation · Receipt capture (Hubdoc) · CIS calculations · No bills or VAT returns |
| IgniteSmall businesses starting out, VAT registered or not | £18 + VAT | £1.80 + VAT | £21.60 | £118.80 + VAT | Quotes and 20 invoices · Enter 10 bills · VAT returns · Payroll at £1.50 per person · 30-day cash flow forecast |
| GrowGrowing businesses | £39 + VAT | £3.90 + VAT | £46.80 | £257.40 + VAT | Unlimited invoices and quotes · Bill automation · Auto-reconcile · Payroll for 1 person · Expenses for 1 user |
| ComprehensiveBusinesses with employees | £55 + VAT | £5.50 + VAT | £66 | £363 + VAT | Payroll for 5 people · Expenses for 5 users · Multiple currencies · Budgeting · 90-day cash flow forecast |
| UltimateLarger small businesses | £70 + VAT | £7 + VAT | £84 | £462 + VAT | Payroll for 10 people · Expenses and projects for 10 users · KPIs and industry benchmarks · 180-day cash flow forecast |
* Cheapest way to pay for a new customer over the first 12 months, with the introductory offer (90% off for 6 months). Billed monthly; the pricing page shows no annual price and plans renew every month until cancelled. New UK customers buying their first organisation on xero.com. Base plan only: add-ons, usage and payment fees are charged in full. Cannot be combined with other offers. Free trial: One month free, as an alternative to the discount.
Do you need MTD software yet?
Answer a few questions to get your start date, every deadline for your calendar, and the products that handle your whole tax return.
Which Xero plan do you need for Making Tax Digital?
Sole trader or landlord, not VAT registered, up to 10 invoices a month
Simple
MTD for Income Tax is included. You cannot reclaim VAT, so budget £8.40 a month including VAT.
VAT registered
Ignite
Simple has no VAT returns. Ignite is the cheapest Xero plan that sends them, and as a VAT-registered business you can usually reclaim the VAT on the subscription.
More than 20 invoices a month, or bills to pay
Grow
Grow removes the invoice cap and automates bills.
Landlord with overseas property
Simple or Ignite
HMRC lists foreign property income as ready in Xero. Many cheaper products do not handle it yet: check that line before you switch.
Extras that change the bill
| Add-on | Price (excluding VAT) |
|---|---|
| Extra people on payroll | £1.50 per person a month (£1 on Ultimate) |
| Extra expenses users | £2.50 per user a month |
| Extra projects users | £5 per user a month |
| Extra bill or payroll payments | £0.20 per payment |
| Auto-reconcile (Ignite only) | £3.50 a month |
| Submit contractor CIS returns | £5 a month |
| Company accounts and tax | £120 a year |
| Some UK bank feeds | Fee passed on by Xero when your bank charges one |
What Xero supports for MTD, according to HMRC
| Quarterly updates | Yes |
|---|---|
| Final tax return | Yes |
| Self-employment income | Ready now |
| UK property income | Ready now |
| Foreign property income | Ready now |
| Other tax return items ready now | 4 of 16 (salary, dividends, pensions, capital gains…) |
| MTD for VAT | Ready now |
| Free version listed by HMRC | No |
Full Xero profile: all 32 HMRC features
Cheaper options for MTD than Xero
Products recognised by HMRC that keep your digital records and send the final tax return, and that are free or start below £7 a month on their own pricing pages. Check that each one covers your income: some handle only self-employment or only property.
| Software | From | Self-employment | UK property | Foreign property |
|---|---|---|---|---|
 Clear Books | Free option £5/month + VATFree plans: unlimited transactions, no bank feeds/invoicing | Ready now | Ready now | Ready now |
 Pandle | Free option £5/month + VAT | Ready now | Ready now | Not included |
 Sage Sole Trader & Landlord | Free option £7/month + VAT25 auto-categorised transactions, 1 bank account, 5 sales invoices a month | Ready now | Ready now | Not included |
 Keepr | Free option £9/month, VAT not statedUnlimited clients, invoices, expenses | Ready now | Not included | Not included |
 Monzo | Free option £9/month, VAT not statedRequires a Monzo Business account | Ready now | Ready now | Not included |
 FreeAgent | Free option £10/month + VATFree only through partner bank accounts (NatWest, RBS, Ulster Bank, Mettle) | Ready now | Ready now | Not included |
 Crunch | Free option £10/month + VAT | Ready now | Not included | Not included |
| Free option £12/month + VAT1 user + 1 accountant; up to 1,000 invoices and 1,000 expenses a year; 50 receipt autoscans a month | Ready now | Ready now | Not included |
Cheaper alternatives to Xero and QuickBooks · Free MTD software · Filter all 158 products
Good to know
- Invoice caps are monthly: Xero's FAQ says invoices above the limit are saved as drafts until next month or until you upgrade. Approving an invoice counts towards the cap as well as sending it, and invoices created by connected apps can count too.
- Xero's own UK price sheet effective 1 September 2025 listed Simple at £7, Ignite at £16, Grow at £37, Comprehensive at £50 and Ultimate at £65. On 9 October 2026 the pricing page shows £7, £18, £39, £55 and £70: Simple did not change.
- You can move to a cheaper plan one month after upgrading.
Questions about Xero pricing
How much is Xero a month in the UK?
From £7 a month excluding VAT for the Simple plan (non-VAT-registered businesses), then £18 for Ignite, £39 for Grow, £55 for Comprehensive and £70 for Ultimate. New customers get 90% off for the first 6 months.
Which Xero plan do I need for Making Tax Digital?
Every current Xero plan is listed as MTD for Income Tax ready. If you are not VAT registered and send up to 10 invoices a month, Simple is enough. If you are VAT registered, you need at least Ignite.
Is Xero free for sole traders?
No. Xero has no free plan; the cheapest is Simple at £7 a month excluding VAT, with a one-month free trial or 90% off for 6 months for new customers.
Does Xero charge VAT?
Yes. Xero's prices exclude VAT, which is added at 20%. If you are VAT registered you can usually reclaim it; if not, it is a real cost.
Prices checked on 9 October 2026 on Xero UK pricing plans (VAT registered and Non-VAT registered tabs, offer terms); Xero Simple plan; Xero Ignite plan (bank feed fees); Xero FAQ: going over plan limits; Xero business plans for the UK effective 1 September 2025 (PDF). MTD features: HMRC software finder, Xero (Open Government Licence v3.0), checked 9 October 2026. Prices and offers change often: check the provider's page before you buy. Clarpilot is independent; commissions never change what we show.