How Taxmo compares to FreeAgent, Xero, QuickBooks, Sage and Crunch

A feature-by-feature comparison of Taxmo against five established UK options: FreeAgent, Xero, QuickBooks, Sage and Crunch. The argument the page makes is one of fit rather than superiority: most UK accounting tools are built for growing businesses and feel heavy for a freelancer managing their own taxes, so Taxmo keeps the tax administration simple and leaves practice-scale work to a separate accountant plan. The comparison marks the rows where Taxmo is behind as well as ahead.

What this comparison is for

All six products keep books, invoice, and file a VAT return to HMRC over Making Tax Digital. The question is not whether they can do the job but which one fits a one-person UK business that mainly wants to know what to file, when, and how much to set aside.

Taxmo's position is that it is purpose-built for UK tax administration rather than general accounting, with a free tier to start and a separate practice plan for firms managing multiple clients. The comparison table on the page covers pricing, tax and compliance, invoicing and payments, day-to-day bookkeeping, practice management and platform reach.

What each of the five does well

The page lists strengths for each competitor in their own right, and several of these are things Taxmo does not do at all.

What Taxmo does that the others on this page do not

The comparison table marks the following rows as Taxmo only among the six compared. They are the reason the page exists, and they are all about removing friction from the tax side rather than adding accounting depth.

Where Taxmo is behind, stated plainly

The page marks these rows against Taxmo rather than hiding them, and they are the honest reasons to choose one of the others.

VAT filing and Making Tax Digital: what everyone here does

All six submit VAT returns to HMRC over the Making Tax Digital API, so this is not a differentiator. What the page describes for Taxmo specifically is that the open obligations are read from HMRC so the return is filed against the period HMRC opened, the nine boxes are computed from your approved records, HMRC's explicit declaration is required before transmission, and HMRC's receipt is stored against the period.

Bridging software is not needed with any of them if your records already live in the software. Bridging exists to carry figures out of a spreadsheet into the Making Tax Digital API, and is irrelevant once your records are in a compatible product.

For Making Tax Digital for Income Tax, Taxmo's answer on this page is no rather than yes: quarterly submission is marked as coming, and the page declines to claim otherwise while the mandation timetable is still moving. Several of the incumbents are further ahead here.

Multi-currency and the sterling VAT question

Taxmo, FreeAgent, Xero, QuickBooks and Sage all support multi-currency invoicing. The distinction the page draws is the conversion basis rather than the currency list.

The others convert on a daily commercial rate. Taxmo lets you choose between the European Central Bank daily reference rate and HMRC's own published monthly rate for the month of supply, which is the alternative method named in VAT Notice 700 section 7.6. Either way the rate is the one current on the invoice's own date, you can override it per invoice, and the sterling VAT is stated on the invoice because UK VAT amounts must be expressed in sterling. Note that section 7.6 requires HMRC's written agreement to move off that basis once adopted.

How the pricing models differ

Taxmo has a free tier with no bank requirement, then paid tiers, and a separate per-client plan for accounting practices with the first clients free. Of the five compared, FreeAgent is free only to customers of certain banks, Sage has a limited basic free option, and Xero, QuickBooks and Crunch have no free tier on the table.

The page publishes competitor list prices with an as-of date and an explicit warning that vendors run promotions and rename tiers, so confirm the current figure with the vendor. Prices are deliberately not repeated here for the same reason. See taxmo.co.uk pricing and each vendor's own site.

If you are an accountant rather than a sole trader

The comparison also covers practice management, where the picture is different. Xero, QuickBooks and Sage offer practice tiers under their partner programmes. Taxmo's accountant plan adds a multi-client dashboard, client workspaces, AI filing review across all clients, AML and KYC tracking, a deadline calendar and a filing run, priced per active client. That plan is described in full at taxmo.co.uk/for-accountants.

Common questions

How does Taxmo compare to FreeAgent?

FreeAgent is a well-established UK accounting product for freelancers with payroll included, multi-currency, a mature mobile app and an open API, and it is free to customers of certain banks. Taxmo's free tier has no bank requirement, and it adds an AI tax assistant and a WhatsApp expense inbox that FreeAgent does not offer. If you bank with one of FreeAgent's partner banks and want payroll, FreeAgent is a strong choice; if you want the tax side automated and a free start regardless of your bank, Taxmo is the closer fit.

Is Taxmo better than Xero for UK sole traders?

It depends on what you need rather than which is better overall. Xero is a full cloud accounting platform with a large integration ecosystem, strong multi-currency and deep reporting, which suits a growing business with an accountant involved. Taxmo is narrower and aimed at a solo UK business: a Self Assessment filing guide, an AI tax assistant and a free tier, without the general ledger machinery. For a sole trader who mainly needs VAT and Self Assessment kept straight, Taxmo is the lighter tool.

Does Taxmo submit VAT returns directly to HMRC like Xero and QuickBooks do?

Yes. Taxmo files VAT returns to HMRC over the Making Tax Digital API on the paid plans, in the same way the incumbents do. Your open VAT obligations are read from HMRC so the return goes against the period HMRC opened, the nine boxes come from your records, HMRC's explicit declaration is required before anything is sent, and HMRC's receipt is stored against the period. The one gap against the incumbents is agent submission, where an accountant files on behalf of clients under an agent authorisation, which is not supported yet.

How do Taxmo's bank feeds compare to Xero, QuickBooks and FreeAgent?

This is the row where Taxmo is genuinely behind. Xero, QuickBooks, FreeAgent and Sage hold a long-lived Open Banking consent and sync in the background, whereas Taxmo's UK connection is an on-demand import: you re-authorise at your own bank for each import and each import returns a recent window rather than your whole history. The upside is that a Taxmo feed never silently stops working when a consent lapses. For older periods, CSV statement upload has no history limit and auto-detects Barclays, HSBC, Lloyds, NatWest, RBS, Starling, Monzo and Revolut layouts.

Do I need bridging software to file a VAT return with Taxmo?

No. Bridging software exists to carry figures from a spreadsheet into HMRC's Making Tax Digital API for people whose records sit outside compatible software. If your records are in Taxmo, Taxmo is the compatible software and there is nothing to bridge. The same is true of the other products on this comparison.

Is Taxmo compatible with Making Tax Digital for Income Tax as well as VAT?

For VAT, yes: returns are submitted directly to HMRC today. For Income Tax, no: quarterly submission is on the roadmap and marked as coming rather than available, and Taxmo will not claim otherwise while the mandation timetable is still moving. Your records are kept in the form it will need. Check GOV.UK for the qualifying income band and start date that apply to you.

Does Taxmo do payroll?

Not on the self-serve plans. FreeAgent, Sage and Crunch include payroll, and Xero and QuickBooks offer it as an add-on, so if you pay employees through PAYE one of those is the better fit or you will need separate payroll software alongside Taxmo. Payroll with payslip generation does exist inside the separate Taxmo accountant practice plan, which is a different product aimed at firms.

What is the cheapest way to keep books and file VAT as a UK sole trader?

Taxmo has a free tier with no bank account requirement, which covers the VAT dashboard, the filing guide and the calculators, so it costs nothing to start. Direct HMRC filing and bank imports sit on the paid tiers. Competitor entry prices vary and vendors change tiers and run promotions often, so check each vendor's current pricing rather than relying on any comparison page, including this one.