Sage, Xero, and QuickBooks are the three dominant accounting platforms for UK small businesses. Between them, they serve the vast majority of sole traders, freelancers, partnerships, and limited companies in the country. They all handle invoicing, bank reconciliation, expense tracking, VAT, and Making Tax Digital compliance. They all work in the cloud. They all have mobile apps. But they are built differently, priced differently, and designed for different types of business — and choosing the wrong one means either overpaying for features you do not use or discovering six months in that you are missing something critical.

This guide compares all three platforms honestly across pricing, features, payroll, reporting, bank reconciliation, VAT, CIS, AI capabilities, and real monthly costs at different business sizes. No ranking is universally correct — the best platform depends on your business. But by the end of this article, you will know exactly which one fits yours.

Pricing Comparison

All three platforms use monthly subscription models, but their pricing structures and what is included at each tier are very different.

Sage Accounting pricing

Plan	Monthly Price (excl. VAT)	Users	Payroll Included	Key Features
Start	£18/mo	1	No	Invoicing, bank feeds, VAT, MTD, Copilot AI
Standard	£39/mo	3	Yes — included	+ CIS, payroll, cash flow forecasting, advanced reports, auto receipts
Plus	£59/mo	Unlimited	Yes — included	+ Multi-currency, inventory, budgets, unlimited users

Sage also offers a completely free Sole Trader plan (Individual Free) for non-VAT registered self-employed users, and is currently running 90% off for the first 6 months across all paid plans — bringing Start down to £1.80/month and Standard to £3.90/month temporarily.

Xero pricing

Plan	Monthly Price (excl. VAT)	Users	Payroll Included	Key Features
Ignite	£16/mo	1	No — add-on £1.50/employee	20 invoices/mo, 10 bills/mo, bank feeds, basic reports
Grow	£37/mo	1 (+ £2.50/extra)	1 employee included (+ £1.50/extra)	Unlimited invoices/bills, auto-reconcile, dashboards
Comprehensive	£50/mo	5 (+ £2.50/extra)	5 employees included (+ £1.50/extra)	+ Multi-currency, bulk reconciliation, 90-day forecast
Ultimate	£65/mo	10 (+ £2.50/extra)	10 employees included (+ £1/extra)	+ Analytics, 180-day forecast, project tracking

Xero's entry price is lower than Sage, but the Ignite plan has hard limits — 20 invoices and 10 bills per month. Once you need unlimited invoicing, payroll, and multi-user access, Xero's cost climbs quickly with per-user and per-employee add-on charges.

QuickBooks pricing

Plan	Monthly Price (excl. VAT)	Users	Payroll Included	Key Features
Sole Trader	£10/mo	1	No	Income/expenses, basic invoicing, Self Assessment estimates
Simple Start	£16/mo	1	No — add-on from £9/mo + £4/employee	Invoicing, bank feeds, VAT, basic reports
Essentials	£33/mo	3	No — add-on from £9/mo + £4/employee	+ Multi-currency, time tracking, supplier management
Plus	£47/mo	5	No — add-on from £9/mo + £4/employee	+ Inventory, project profitability, budgeting
Advanced	£115/mo	25	No — add-on from £9/mo + £4/employee	+ Workflow automation, batch invoicing, custom permissions

QuickBooks has the cheapest entry point at £10/month for sole traders. But payroll is never included — it is always a separate add-on starting at £9/month base plus £4 per employee. For any business with staff, this makes QuickBooks significantly more expensive than it first appears.

What You Actually Pay: Real Costs at Different Business Sizes

Advertised prices are misleading because they do not include the add-ons most businesses need. The table below shows what you actually pay per month for accounting plus payroll at common team sizes.

Business Size	Sage (Standard)	Xero (Grow + Payroll)	QuickBooks (Simple Start + Payroll Core)
Sole trader, no staff	£0/mo (Free plan)	£16/mo (Ignite)	£10/mo (Sole Trader)
1 employee	£39/mo	£37/mo	£29/mo (£16 + £9 + £4)
5 employees	£39/mo	£43/mo (£37 + £6)	£45/mo (£16 + £9 + £20)
10 employees	£39/mo	£50.50/mo (£37 + £13.50)	£65/mo (£16 + £9 + £40)
25 employees	£39/mo	£73/mo (£37 + £36)	£125/mo (£16 + £9 + £100)

This is where the picture changes dramatically. At 5 employees, Sage Standard costs £39/month with accounting and payroll included. Xero Grow plus payroll for the same team costs £43/month. QuickBooks Simple Start plus payroll Core costs £45/month. The gap widens rapidly — at 25 employees, Sage is still £39/month while QuickBooks has tripled to £125/month. Sage's bundled payroll model means your cost does not increase as you hire, which is a substantial advantage for growing businesses.

Fintech infographic comparing Sage, Xero, and QuickBooks

Bank Reconciliation

Bank reconciliation is the task you perform most frequently in accounting software, so the quality of this experience matters enormously.

Xero wins here. Xero's bank feed integration is widely considered the best of the three. Transactions import cleanly, the matching algorithm is intelligent, and the reconciliation flow is smooth enough that most users can process their entire bank feed in minutes. Xero uses machine learning to improve its matching suggestions over time, and the auto-reconcile feature on Grow and above can match straightforward transactions without any user input.

QuickBooks is solid. Bank feeds work reliably, and QuickBooks uses machine learning to suggest categories for recurring transactions. The interface is slightly more cluttered than Xero's but gets the job done effectively.

Sage is adequate. Bank feeds connect to all major UK banks and transaction import works well. However, the matching suggestions require more manual intervention than Xero, and the reconciliation workflow is less streamlined. Sage has improved this significantly in recent updates, but Xero still has the edge in day-to-day bank reconciliation experience.

Invoicing

All three platforms handle invoicing well, but there are important differences in limits and flexibility.

Feature	Sage	Xero	QuickBooks
Unlimited invoices	All paid plans	Grow and above (Ignite: 20/mo)	All plans
Invoice customisation	Good — logo, colours, fields	Good — templates, branding	Strong — most flexible templates
Recurring invoices	Yes	Yes	Yes
Quotes and estimates	Standard and above	All plans	All plans
Automated payment reminders	Yes — Copilot AI chasing	Yes — automated reminders	Yes — automated reminders
Online payment links	Yes — Stripe, GoCardless	Yes — Stripe, GoCardless, direct debit	Yes — QuickBooks Payments

Sage's differentiator here is Copilot AI-powered invoice chasing. Rather than just sending templated reminder emails, Copilot monitors your overdue invoices and drafts context-aware chasing messages — with early adopters reporting getting paid an average of 7 days faster. Xero and QuickBooks both send automated reminders, but they follow fixed templates without AI personalisation.

Payroll

This is the feature that creates the biggest practical and cost difference between the three platforms.

Payroll Feature	Sage	Xero	QuickBooks
Included in accounting plan	Yes — Standard and Plus	Partially — limited employees per plan	No — always a separate add-on
Extra cost per employee	£0 (bundled)	£1–£1.50/employee/mo beyond plan limit	£4/employee/mo (Core)
RTI submissions to HMRC	Yes	Yes	Yes
Pension auto-enrolment	Yes — NEST, NOW, People's, Smart	Yes — NEST, NOW, People's, Smart	Yes — NEST
CIS returns	Yes — Standard and Plus	No — requires third-party app	Limited
Automatic tax code updates	Yes — from HMRC	Yes	Yes
Statutory payments (SSP, SMP)	Yes	Yes	Yes
Payslips and P60s	Digital — app + portal	Digital — online	Digital — online

Sage is the only platform that bundles full payroll into its accounting subscription at no extra per-employee cost on Standard and Plus. This means a business with 25 employees pays exactly the same £39/month as a business with 1 employee. On Xero, that same business pays £73/month. On QuickBooks, it pays £125/month. Over a year, the savings are significant — and they grow as you hire.

CIS is another critical differentiator. If you are a construction business, Sage handles CIS deductions, monthly returns, and HMRC submissions within the same platform. Xero requires a third-party CIS app, and QuickBooks has limited CIS support. For any business in the construction industry, this is often the deciding factor.

VAT and MTD Compliance

All three platforms are fully MTD-compliant for VAT and can submit VAT returns directly to HMRC. The core VAT experience is comparable across all three.

VAT Feature	Sage	Xero	QuickBooks
MTD VAT submission	Yes — all plans	Yes — all plans	Yes — all plans (except Sole Trader)
MTD for ITSA (April 2026)	Yes — including free plan	Yes	Yes
MTD AI Agent	Yes — UK's first	No	No
VAT schemes (Flat Rate, Cash)	Yes	Yes	Yes
VAT detail drill-down	Yes — per box	Yes	Yes

Sage has a unique advantage here with the MTD AI Agent — the UK's first agentic AI tool specifically designed to automate the preparation and submission of quarterly income updates for Making Tax Digital for Income Tax Self Assessment. Neither Xero nor QuickBooks has an equivalent. For accountants managing multiple clients through the MTD transition, this is a significant differentiator.

Reporting

QuickBooks has the deepest reporting engine. Custom reports, class and location tracking, saved report templates, and genuine flexibility make QuickBooks the strongest choice for businesses that need detailed management reporting.

Sage is strong on analysis types. Sage's multi-dimensional analysis types allow you to tag transactions by department, project, location, or custom dimensions — and filter all four main reports (P&L, balance sheet, trial balance, cash flow) by those tags. This is a powerful feature for businesses with multiple revenue streams or locations. Budget vs actual variance reporting is available on the Plus plan.

Xero's reporting is adequate but limited. Standard reports cover the essentials, but customisation options are restricted unless you are on the Ultimate plan. Xero's tracking categories work similarly to Sage's analysis types but are limited to two dimensions rather than multiple.

Three accounting dashboards comparison

AI Capabilities

This is the fastest-evolving area of difference between the three platforms.

AI Feature	Sage Copilot	Xero Just Ask	QuickBooks Intuit Assist
Included in all plans	Yes	Rolling out	Rolling out
Automated invoice chasing	Yes — drafts and sends	Limited	Limited
Receipt data extraction	Yes — totals, tax, dates	Yes	Yes
Anomaly detection	Yes — proactive alerts	Basic	Basic
Cash flow forecasting	Yes — forward-looking	Yes — 30 to 180 days by plan	Yes
Natural language questions	Yes	Yes	Yes
MTD AI Agent	Yes — autonomous compliance	No	No
Finance-specific AI training	Yes	General + finance	General + finance

Sage Copilot is the most mature and capable AI assistant of the three in 2026. It goes beyond answering questions — it actively automates tasks like invoice chasing, detects anomalies proactively, and has progressed into agentic AI with the MTD Agent. Xero and QuickBooks are both developing AI capabilities, but they are earlier in the journey and currently more focused on question-answering than autonomous task execution.

App Integrations

Xero wins decisively. Xero has the largest app marketplace of any UK accounting platform, with over 1,000 third-party integrations covering everything from inventory and e-commerce to CRM, project management, and payment processing. If you rely on specific industry tools, the chances are highest that Xero has an integration for them.

QuickBooks has a strong ecosystem. The QuickBooks app marketplace is large and growing, with deep integrations for e-commerce platforms (Shopify, WooCommerce), payment processors, and inventory tools.

Sage has a smaller but growing marketplace. Sage integrates with the most important UK tools — Stripe, GoCardless, Shopify, AutoEntry — but its third-party ecosystem is noticeably smaller than Xero's. If you need a wide range of niche integrations, Xero is the safer choice.

Support

Support	Sage	Xero	QuickBooks
UK phone support	Yes — all plans	No — email and chat only	Yes — callback system
Email support	Yes	Yes	Yes
Live chat	Yes	Yes	Yes
Knowledge base	Extensive	Extensive	Extensive
Accountant network	Yes — Sage Partner	Yes — Xero Advisor	Yes — QB ProAdvisor

Sage is the only platform that offers direct UK phone support on all plans. Xero relies entirely on email and chat — there is no phone number to call. QuickBooks offers a callback system on some plans. For business owners who want to speak to a human when something goes wrong, Sage has a clear advantage.

Who Each Platform Is Best For

Choose Sage if:

You employ staff and want payroll bundled in — saving hundreds per year versus Xero and QuickBooks as your team grows
You are in construction and need CIS returns handled natively
You want the most capable AI assistant (Copilot) for invoice chasing, anomaly detection, and cash flow insights
You are a sole trader wanting a free plan with MTD compliance
You value UK phone support
You want accounting, payroll, and HR on one platform with a single login

Choose Xero if:

You need the best bank reconciliation experience — Xero is the smoothest and most intelligent of the three
You rely on a wide range of third-party apps and integrations — Xero's marketplace is the largest
Your accountant prefers Xero — many UK accountancy practices standardise on Xero
You have a very small team (1–3 employees) where per-employee payroll costs are manageable
You prioritise interface design and ease of use for non-accountants

Choose QuickBooks if:

You are a sole trader wanting the cheapest entry point — £10/month with no frills
You need the deepest custom reporting engine with class and location tracking
You run an e-commerce business with strong Shopify or WooCommerce integration needs
You do not employ staff and therefore do not need bundled payroll
You want project profitability tracking on the Plus plan

The Bottom Line

For sole traders with no staff, QuickBooks at £10/month or Sage's free plan are the cheapest starting points. Once you employ even a handful of people, the maths shift dramatically — Sage Standard at £39/month with payroll included becomes cheaper than both Xero and QuickBooks at 5 employees and the gap only widens from there. Xero's strength is its bank reconciliation workflow and app ecosystem, which matter most to businesses that rely on multiple third-party tools. QuickBooks' strength is reporting depth and its low sole-trader entry price.

No platform is universally best. But for the majority of UK small businesses — especially those with employees, construction businesses needing CIS, and anyone who values having accounting, payroll, and AI in one integrated platform — Sage offers the strongest overall value proposition in 2026.

This article is for informational purposes only and does not constitute financial, tax, or accounting advice. Pricing and features are accurate as of March 2026. All prices exclude VAT unless stated otherwise. Promotional offers may change — visit each provider's website directly for the most current pricing.