Xero and QuickBooks together account for the majority of UK SME cloud accounting software subscriptions. According to Kaeltripton analysis of HMRC Making Tax Digital requirements, pricing structures, and third-party integration ecosystems, the choice between the two depends primarily on business size, payroll complexity, and existing accountant relationships.
Pricing Comparison (June 2026)
| Plan | Xero | QuickBooks |
|---|---|---|
| Entry | GBP16/mo (Starter) | GBP14/mo (Simple Start) |
| Standard | GBP33/mo (Standard) | GBP28/mo (Essentials) |
| Premium | GBP47/mo (Premium) | GBP38/mo (Plus) |
| Payroll | Add-on from GBP5/mo | Included on some plans |
Both providers regularly offer introductory discounts of 50-90% for the first 3-6 months.
Making Tax Digital Compliance
Both Xero and QuickBooks are HMRC-recognised MTD-compatible software for VAT. MTD for Income Tax (MTD ITSA) rollout continues in 2026 for businesses with income above GBP50,000. Verify against HMRC's published approved software list before committing.
Key Differences
Bank feeds - Xero has stronger direct bank feed connections with UK high street banks.
Payroll - QuickBooks includes payroll on higher plans. Xero payroll is a separate add-on. For businesses with more than 5 employees, total cost difference narrows significantly.
Accountant ecosystem - Xero has a larger certified advisor network in the UK. If an accountant recommends one platform, their workflow efficiency is a practical consideration.
Inventory - QuickBooks Plus includes inventory tracking. Xero requires a third-party integration for most inventory management.
Which to Choose
- Sole traders and micro businesses under 5 employees: QuickBooks Simple Start on price
- Growing SMEs with complex payroll: Xero for ecosystem and bank feed quality
- Businesses with existing accountant on one platform: match the accountant
- Product businesses needing inventory: QuickBooks Plus
Full feature comparison, MTD compliance guide, and pricing breakdown at kaeltripton.com/xero-vs-quickbooks-uk. Primary sources: HMRC MTD documentation, Xero and QuickBooks published terms.
