Xero vs QuickBooks for UK businesses
Both are HMRC-recognised for Making Tax Digital, both file VAT returns, both run payroll with RTI, and both connect to UK banks through Open Banking. The differences are in how the plans are cut: what each tier includes, how many users you get, and when multi-currency and payroll start costing more.
Below is what each vendor's UK pages said on 8 November 2026, what GOV.UK says MTD requires, and how user access works if your bookkeepers sit overseas.
Serkan Honeine, Co-founder, CoSauce
Published · Last updated
Plans and prices
Xero UK has four plans, priced per month excluding VAT. New customers can get 90% off for the first six months, which doesn't apply to add-ons or payment fees (Xero UK pricing). These are the full prices after that:
| Xero plan | Per month, excl. VAT | What changes |
|---|---|---|
| Ignite | £18 | 20 invoices and 10 bills. Payroll at £1.50 per person. No multi-currency. |
| Grow | £39 | Payroll for 1 person. No multi-currency. |
| Comprehensive | £55 | Payroll for 5 people. Multi-currency included. |
| Ultimate | £70 | Payroll for 10 people. Multi-currency and projects included. |
QuickBooks Online UK has five plans. Intuit's pricing page loads its prices live, and when we checked on 8 November 2026 the figures didn't render, so we haven't quoted them (QuickBooks UK pricing). Its plan cards say "All prices + VAT @20%", and it was also running a 90% discount for six months for new customers. Check the live price yourself before you compare. What the page did show is the user count and features per plan:
| QuickBooks plan | Users | What changes |
|---|---|---|
| Sole Trader Plus | 1 | Listed as MTD for Income Tax ready. No direct VAT submission. |
| Simple Start | 1 | VAT submission to HMRC. No multi-currency. |
| Essentials | 3 | Adds multi-currency, bill payment and recurring invoices. |
| Plus | 5 | Adds projects, inventory and budgeting. |
| Advanced | 25 | Adds custom reports, workflow automation and more user roles. |
A worked example on the Xero side. Take a VAT-registered business with three employees and no foreign currency. On Ignite it pays £18 plus 3 × £1.50 for payroll, so £22.50 a month before VAT. That holds while it stays under 20 invoices and 10 bills. Start invoicing in euros and you need Comprehensive at £55, which also covers payroll for five people. Do the same sum on QuickBooks once you have its live prices.
What MTD requires, and what each one says
MTD for VAT applies to all VAT-registered businesses. You keep certain VAT records in "functional compatible software" and file returns through it, and any data moving between programs has to travel by a digital link. HMRC says copy and paste doesn't count (HMRC VAT Notice 700/22).
MTD for Income Tax covers sole traders and landlords. It started on 6 April 2026 for qualifying income over £50,000 in 2024 to 2025. It moves to over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028 (GOV.UK MTD for Income Tax). You keep digital records, send quarterly updates, and file your return by 31 January (GOV.UK MTD overview). The quarterly deadlines are 7 August, 7 November, 7 February and 7 May (GOV.UK quarterly updates).
Xero says all its plans are MTD ready, and describes the four quarterly updates followed by a final declaration (Xero UK MTD). QuickBooks says it is HMRC recognised and lists MTD for VAT on every plan from Simple Start up. Its Sole Trader Plus plan is aimed at the self-employed and doesn't submit VAT (QuickBooks UK MTD). If you're a sole trader who is also VAT-registered, that last point decides the plan for you.
Payroll and RTI
Every employer must send HMRC a Full Payment Submission on or before payday (GOV.UK reporting to HMRC). Xero says its payroll sends an FPS after each pay run and an EPS each tax period. It works out auto-enrolment contributions for Nest and The People's Pension (Xero UK payroll). Payroll comes bundled by headcount.
QuickBooks sells payroll as an add-on in three tiers, Core, Premium and Elite, on any plan from Simple Start up. It says it submits the FPS automatically and connects to pension providers including Nest, with Smart Pensions on Premium and Elite only (QuickBooks UK payroll). Its payroll prices didn't load either.
Bank feeds
Xero says it pulls data from over 21,000 financial institutions worldwide, and links to a list of UK feeds rather than naming banks on the page (Xero UK bank feeds). QuickBooks connects UK banks through Open Banking. Its help page says connections expire after 90 days, and a banner tells you when to renew consent. If your bank isn't supported, you upload statements by hand (QuickBooks UK help).
Multi-currency
Xero handles over 160 currencies with automatic exchange rates, on Comprehensive and Ultimate only (Xero UK multi-currency). QuickBooks lists multi-currency from Essentials up. Know this before you tick the box. A QuickBooks Team answer on its UK community says multicurrency can't be turned off once it's on, and that stops you downgrading (QuickBooks UK community).
User roles and multi-factor authentication
Xero renamed its roles in July 2026, in a release its blog described on 31 October. Advisor is now Administrator, Read Only is now Viewer, Standard stays, and Invoice Only has split into four roles covering sales, purchases, both, or drafts only. Payroll Admin is its own role. The same release lets you hide bank balances and feeds from Standard users (Xero blog). Xero has required MFA for every user invited into an organisation, in every region including the UK, since the end of 2021 (Xero MFA FAQ).
QuickBooks counts users against the plan limit of 1, 3, 5 or 25. "View company reports" and "Track time only" users don't count, and your accountant gets access separately (QuickBooks UK help). Intuit's help says it sends a one-time code by email or text when you sign in, with no setup needed. You can opt in to two-step verification instead (QuickBooks help). That article isn't labelled for a region, so confirm the UK behaviour in your trial.
App stores and accountant partners
Both have an app store: Xero's and the QuickBooks App Store. Search each for the apps you already use.
For firms, the Xero partner programme is free, with tiers from Partner to Platinum. Silver and above get Xero Tax and practice management in Partner Hub, and Bronze and above get discounts on client subscriptions (Xero partner programme). Partner Hub also shows each client's VAT status, due dates and MTD connection errors in one place (Xero Partner Hub).
Intuit says accountants can get up to 50% off client subscriptions through wholesale billing. Its Intuit Accountant Suite has a free Core tier and an Accelerate tier that is free in beta, then £69 a month plus VAT from January 2027. The ProAdvisor Programme is being replaced by Intuit ProPartner Accountants in early 2027 (QuickBooks UK accountants). If you're signing up a practice now, ask what that change means for your discount.
Who each tends to suit
Xero tends to suit you if you want payroll priced into the plan, or your accountant runs their practice in Partner Hub. It also suits a small team that will grow into multi-currency. QuickBooks tends to suit a sole trader who needs MTD for Income Tax and isn't VAT-registered. It also suits you if you want report-only and time-tracking users outside your plan limit, or your accountant works in Intuit Accountant Suite. Neither list is a ranking. Before you pick:
- Open a trial of each and connect your own bank. Check the feed for every account you use, including credit cards.
- Run one VAT return in each, start to finish, before you commit.
- Price the plan you'll need in two years, not the one you need today. Multi-currency and payroll headcount are where the jump happens.
- Ask your accountant which one their team works in every day. They'll be faster in it, and so will you.
- List the three or four other apps you rely on and check each one connects.
For practices that use an offshore team
If some of your bookkeepers work from overseas, how roles work matters more than the price. In Xero, give each person their own login in each client organisation, at the lowest role that does the job. That might be Viewer for review work, Standard for reconciliations, and Payroll Admin only for whoever runs pay. Hide bank balances from Standard users if the work doesn't need them. In Intuit Accountant Suite, you pick a role for each team member and tick only the clients they work on. Intuit warns that not every role is available on every client (Intuit Accountant Suite help).
Either way, named logins with MFA and access set client by client keep it auditable. The Xero steps are in onboarding an offshore bookkeeper onto Xero. The rest of the toolset is in a cloud accounting stack for an offshore team, and what to ask a provider is in security questions for an offshore accounting provider.
Questions
Do I need to change software for MTD for Income Tax?
Only if what you use now can't send quarterly updates to HMRC. Both Xero and QuickBooks say they're ready. If your qualifying income was over £30,000 in 2025 to 2026, you'll need it from 6 April 2027.
Can I move from QuickBooks to Xero later, or the other way?
Yes, but plan it around a VAT quarter end, and keep read access to the old file for your records. If you turned on multicurrency in QuickBooks, you can't downgrade that file, so moving is the only way off it.
Next step
If you run a UK practice and the problem is hours rather than software, book a call with me. We run outsourced bookkeeping from South Africa, one or two hours ahead of the UK, with named logins inside your Xero or QuickBooks and a weekly review. You can read more about how we work with UK businesses and how we set up a team.