FreeAgent Accounting Software: Pros and Cons by FreeAgent Accountants
In this guide, we explore what FreeAgent offers, who it’s best suited for, its standout features, pricing, pros and cons, and how it compares with other popular platforms like Xero and QuickBooks.
What is FreeAgent?
FreeAgent is a cloud-based accounting software designed specifically for UK small businesses, sole traders, freelancers, and contractors. With a strong focus on automation and ease of use, it helps simplify everything from invoicing to Self Assessment.
FreeAgent is an award-winning accounting software developed in the UK and tailored for micro-businesses and their accountants. Since being acquired by NatWest Group in 2018, it has been offered for free to NatWest, Royal Bank of Scotland, and Ulster Bank business current account holders—a significant perk for eligible customers.
Its intuitive dashboard provides clear insights into cash flow, taxes due, and profit/loss at a glance, helping business owners keep their finances in check without needing a background in accounting.
Who is FreeAgent Best For?
FreeAgent is ideal for:
Sole traders and freelancers looking for an all-in-one solution
Small limited companies needing easy tax management
Contractors and consultants with recurring clients or simple billing cycles
Users of NatWest, RBS or Ulster Bank business accounts, who can access the software for free
For larger businesses or those needing more advanced inventory or project costing tools, alternatives like Xero or Sage may be more suitable.
Key Features of FreeAgent
| Feature | What It Does |
|---|---|
| Invoicing | Automated and customised invoicing tools. |
| Bank Feeds | Connects to UK banks for live transaction updates. |
| Tax Calculations | Automatically calculates VAT, CT, and SA. |
| Expense Tracking | Mobile receipt capture and expense categorisation. |
| Payroll | RTI-compliant for up to 10 employees. |
| Making Tax Digital | HMRC-recognised for digital VAT submissions. |
FreeAgent Pricing (2025)
FreeAgent offers a simple pricing structure based on business type. Prices include unlimited users and support.
| Plan | Monthly Price (Excl. VAT) | Details |
|---|---|---|
| Sole Trader | £14.50 | Includes Self Assessment features. |
| Partnership/LLP | £24 | Supports multiple partners and profit shares. |
| Limited Company | £29 | Corporation Tax, payroll, and dividend support. |
| Free via NatWest Group | £0 | Only for eligible NatWest, RBS or Ulster Bank users. |
Benefits of Using FreeAgent
✅ Designed for UK tax system
✅ Simple and intuitive user interface
✅ Built-in HMRC compliance
✅ Free for eligible NatWest Group customers
✅ Strong UK-based support
Potential Drawbacks
❌ Lacks advanced inventory or project costing features
❌ Limited custom reporting compared to competitors like Xero
❌ More tailored for service-based businesses than product-based ones
FreeAgent vs Other Accounting Software
| Feature | FreeAgent | Xero | QuickBooks |
|---|---|---|---|
| UK Tax Focus | ✅ High | ✅ Medium | ✅ Medium |
| Inventory | ❌ Basic | ✅ Advanced | ✅ Good |
| Payroll | ✅ Included | ✅ Add-on | ✅ Add-on |
| Making Tax Digital | ✅ Supported | ✅ Supported | ✅ Supported |
| Typical Price Range | £14.50–£29 | £15–£54 | £12–£35 |
Is FreeAgent Right for You?
If you’re a UK-based freelancer, contractor, or small business owner seeking HMRC-compliant, simple accounting software, FreeAgent is an excellent choice—especially if you bank with NatWest, RBS, or Ulster Bank.
For those needing more robust enterprise tools, consider Xero or QuickBooks, but for the majority of sole traders and small limited companies, FreeAgent offers excellent value.
Frequently Asked Questions
Is FreeAgent HMRC-recognised?
Yes, FreeAgent is on HMRC’s list of recognised software for Making Tax Digital.
Can I do my Self Assessment with FreeAgent?
Yes, FreeAgent supports Self Assessment filing directly to HMRC for sole traders.
Does FreeAgent work with accountants?
Yes, your accountant can access your FreeAgent account and manage your bookkeeping and filings.
Is FreeAgent free for all users?
It’s free only for eligible NatWest, Royal Bank of Scotland, or Ulster Bank business account holders. Others must pay a monthly subscription.
Final Thoughts
FreeAgent stands out as one of the best cloud accounting solutions for UK freelancers, contractors, and small business owners. It simplifies tax compliance, streamlines bookkeeping, and provides peace of mind—backed by NatWest’s financial strength and tailored for UK-specific needs.