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Xero accounting software offers users a choice of four different plans. These plans are suited to different business types, including businesses that are just starting out, the self-employed and growing businesses, businesses with employees, and scaling businesses.
Based on where you are in your small business journey, you should be able to choose the plan most suited to your business and your circumstances. Every plan is Making Tax Digital (MTD) compliant, allows you to submit VAT returns directly to HM Revenue & Customs (HMRC), and can provide account access to an unlimited number of users at no extra cost.
However, you should be aware that Xero requires users to pay an additional monthly fee for certain add-on features, while some features are restricted or are only available on the most advanced plan. For example, payroll is not available on Ignite, the most basic plan, and is limited to between one and 10 people depending on whether you choose Grow, Comprehensive or Ultimate. Project tracking is only available on Ultimate, and is limited to 10 users, with each subsequent user charged at £5.
» MORE: Best accounting software for small businesses
Key features
Key features
- Making Tax Digital-compliantAll Xero accounts are MTD-compliant, and allow you to submit VAT returns directly to HMRC.
- Unlimited usersYou can have an unlimited number of users logged into your Xero account at no extra cost.
- Payroll featuresXero’s Grow, Comprehensive and Ultimate plans all include payroll for one, five and 10 people respectively (additional people are charged at £1), which is cheaper than many competitors.
- Cash-flow forecastsEvery Xero plan comes with the ability to forecast your cash flow over seven- and 30-day periods.
Xero accounting software pros & cons
Pros
- Every Xero account is Making Tax Digital-compliant.
- You can use Xero to submit MTD-compliant VAT returns directly to HMRC.
- Xero’s payroll features are cheaper than many of its competitors.
- You have an unlimited number of users logged into your Xero account at no extra cost.
- Seven- and 30-day cash flow forecasting is available with every plan.
Cons
- The entry-level Xero Ignite plan is more expensive than many comparable plans elsewhere.
- You can only access multiple currencies if you pay for the more expensive Comprehensive or Ultimate plans.
The pros and cons featured here are chosen by us based on our expert, research-based opinions. They are unlikely to be the only product features and restrictions that you should consider. Pros and cons are subjective and you should align them to your own personal and business circumstances. Information was correct at the time of publication but may have changed since.
Xero accounting software full review
Founded in 2006, Xero is a global accounting software platform that claims to have over 4.2 million subscribers across the world.
All Xero plans are compliant with Making Tax Digital. It is now required by the UK government that you use MTD compatible software when submitting returns as a VAT-registered business. Further MTD rules will be introduced around income tax returns in April 2026 and 2027.
In the UK, Xero offers four options: Ignite, Grow, Comprehensive and Ultimate, each of which allows for an unlimited number of users. The plans, pre-VAT and pre-discounts, are as follows:
- Ignite: This plan costs £16 a month It allows customers to enter 10 bills a month and approve and send 20 invoices, alongside submitting VAT returns to HMRC, bill and receipt capture, automatic Construction Industry Scheme (CIS) calculations, and short-term cash-flow forecasting.
- Grow: This plan costs £33 a month, and includes everything in the Ignite plan, but with unlimited invoices and bill entries. On top of this, you can also pay up to five bills (20p per additional bill), and you get payroll for one person, and expenses for one user (additional users are charged at £2.50)
- Comprehensive: This plan costs £47 a month. On top of everything included in the Grow plan, you can also use multiple currencies when accounting and you get advanced cashflow predictions. On top of this, you can also pay up to 10 bills (20p per additional bill), and you get payroll for five people, and expenses for five users (additional users are charged at £2.50)
- Ultimate: This plan costs £59 a month. This tier includes everything in the Comprehensive plan, as well as a built-in payroll function for up to 10 people (£1 per additional user, expenses for up to 10 users (£2.50 per additional user), and project tracking for 10 users (£5 per additional user).
Xero also offers a number of add-ons for the Starter, Standard and Premium plans:
- Payroll: This starts at £5 a month for up to five employees.
- Expenses: This starts at £2.50 a month for one user.
- Projects: The ability to track projects starts at £5 a month for one user.
Xero accounting software features: at a glance
| Monthly fee (pre-discounts, pre-VAT) | £16 (Ignite) £33 (Grow) £47 (Comprehensive) £59 (Ultimate) |
| Free trial | 30 days |
| Making Tax Digital compliant | Yes |
| Submit VAT to HMRC | Yes |
| Payroll costs per month (for five employees, pre-discounts, pre-VAT) | Not available (Ignite) One person (Grow) Five people (Comprehensive) 10 people, £1 per additional person (Ultimate) |
| Multi-user access | Yes (Unlimited) |
| Multi-currency accounting | Yes (Premium and Ultimate) |
| Customer service | 24/7 online support via email |
Where Xero stands out
Free trial and introductory offers: Xero offers a 30-day free trial when you first sign up for an account. Xero also offers discounts, which can vary depending on when you apply.
Making Tax Digital-compliant VAT returns: All Xero accounting plans are MTD-compliant, and allow you to submit VAT returns directly to HMRC.
Cash-flow forecasting: Every Xero accounting plan allows you to forecast your cash flow over a seven- or 30-day period. Longer term cash flow forecasts of 60 and 90 days are available with Analytics Plus. Analytics Plus is only available on the Comprehensive and the Ultimate plan.
Payroll: Xero’s Grow, Comprehensive and Ultimate plans all include payroll for one, five and 10 people respectively (with additional people charged at £1 for Ultimate only), which is at the cheaper end of the market.
Multiple user access: You can have an unlimited number of users attached to your Xero account at no extra cost.
Where Xero falls short
Monthly fee: At £16 a month (pre-VAT), Xero’s Ignite plan is more expensive than many comparable options at other accounting software providers.
Paywalled features: Certain basic features, such as the ability to claim expenses, are restricted to a certain number of users depending on the plan you choose, with charges for additional users.
Multi-currency: You can only access multi-currencies with the more expensive Comprehensive and Ultimate plans.
Customer support: While Xero claims to provide 24/7 online support, this requires you to send Xero an email, which it will respond to as soon as it can. There is no live chat option, nor does Xero publish a customer support phone number you can call.
Xero customer reviews
Xero’s customers have left reviews on a range of sites. Generally, these reviews are very positive.
- App Store: 4.6 out of 5, based on over 1,100 reviews
- Google Play: 4.6 out of 5, based on over 14,000 reviews
- Trustpilot: 3.6 out of 5, based on over 7,300 reviews
This information is correct as of 10 October 2024.
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