FreeAgent
Cloud accounting software for freelancers, micro-businesses, and their accountants.
About FreeAgent
FreeAgent handles invoicing, bank reconciliation, expense tracking, and UK tax estimation in a single dashboard built for sole traders and micro-businesses with fewer than ten employees. Bank feeds pull in transactions automatically, and the reconciliation workflow is straightforward enough that most users finish a month's books in under an hour. MTD VAT filing goes directly to HMRC from inside the app, no bridging software required. The tax estimation panel updates in real time as you log income and expenses, which gives freelancers a running Self Assessment liability figure rather than an annual shock. Project tracking lets contractors split expenses and time across clients, useful for anyone billing on a project basis who needs to prove costs. Where FreeAgent struggles: it is built around a single entity, so accountants managing ten or more clients will find the client-switching workflow slow compared to Xero Practice Manager or QuickBooks Online Accountant. Reporting is thin — you get a P&L and balance sheet, but nothing close to the custom report builder in Xero. Payroll covers basic PAYE but lacks the depth of dedicated payroll tools like BrightPay. If your business is scaling past micro, you will hit the ceiling quickly.
Best for
UK freelancers and micro-businesses wanting simple accounting with HMRC compliance
Key Features
- Automated bank reconciliation with bank feeds
- MTD VAT compliance and submission
- Real-time tax estimation and calculations
- Project-based expense tracking
- HMRC-compliant invoicing
Pros & Cons
Pros
- MTD VAT submissions go directly to HMRC from inside FreeAgent, no third-party bridging software needed
- Real-time Self Assessment tax estimate updates every time you record income or an expense, so quarterly surprises are rare
- Bank feeds connect to most UK high-street banks and auto-match transactions, cutting manual reconciliation to minutes per week
- Project-level expense and time tracking lets contractors split costs across clients and generate itemised invoices directly from logged time
- HMRC-compliant invoice templates with automatic late-payment reminders reduce chasing time for freelancers
- GoCardless and Stripe integrations allow direct debit and card payment collection from the same invoice, shortening payment cycles
- NatWest and Royal Bank of Scotland customers get FreeAgent free with their business bank account, eliminating the subscription cost entirely
Cons
- No free trial or evaluation tier unless you hold an eligible NatWest or RBS business account — you commit to a paid plan to test it
- Custom reporting is minimal; you cannot build segmented or multi-dimensional reports without exporting to a spreadsheet
- Single-entity architecture makes it impractical for accountants running a client portfolio — no bulk updates, no consolidated dashboard
- Payroll handles basic PAYE but lacks pension auto-enrolment management depth, requiring a separate tool like BrightPay for anything complex
- No multi-currency invoicing on the entry-level plan, which excludes freelancers billing overseas clients in their local currency
- Switching away requires exporting data manually; there is no direct migration tool to Xero or QuickBooks, creating moderate lock-in
Ledger Brief Take
Targets the sweet spot between basic invoicing tools and full accounting platforms, with MTD compliance baked in rather than bolted on. The UK tax estimation and HMRC integration make it genuinely valuable for British micro-businesses, though accountants managing multiple clients might find the single-entity focus limiting.
Frequently Asked Questions
Common questions accountants ask about FreeAgent.
How does FreeAgent pricing work and what does the entry plan include?
FreeAgent starts at $14 per month for sole traders, with higher tiers for partnerships and limited companies. All plans include MTD VAT filing, bank feeds, invoicing, and Self Assessment support. There is no free tier. NatWest and Royal Bank of Scotland business account holders get access at no extra cost through their bank.
Does FreeAgent integrate with Xero or QuickBooks?
No direct integration exists with Xero or QuickBooks. FreeAgent connects to Zapier, which allows basic data piping, but there is no native two-way sync. If your accountant works primarily in Xero or QuickBooks Online, expect to share reports manually or via exports rather than live data access.
How does FreeAgent compare to Xero for UK micro-businesses?
FreeAgent is simpler and cheaper, and its Self Assessment and MTD workflows are built for UK sole traders specifically. Xero has deeper reporting, stronger multi-currency support, and a far larger app ecosystem. If you need custom reports or plan to grow beyond ten employees, Xero scales better. If you want HMRC compliance with minimal setup, FreeAgent is faster to get running.
Is FreeAgent data stored securely and where are servers located?
FreeAgent stores data on servers in the UK and Ireland and uses 256-bit SSL encryption in transit. The company is headquartered in Edinburgh and is regulated as a UK business, which matters for GDPR compliance. Two-factor authentication is available and recommended for all accounts.
Can accountants manage multiple clients inside FreeAgent?
Accountants can access client accounts through FreeAgent's partner programme, but there is no consolidated dashboard or bulk workflow tool. Each client is a separate login context. Firms managing more than a handful of clients will find this slower than Xero Practice Manager or QuickBooks Online Accountant, which are built explicitly for multi-client workflows.
Does FreeAgent handle VAT for businesses on the Flat Rate Scheme?
Yes. FreeAgent supports Flat Rate Scheme VAT calculations and submits returns directly to HMRC under MTD rules. You set the flat rate percentage in settings and the software applies it automatically. Cash accounting and accrual VAT schemes are also supported.