For a one-person consultancy with the occasional subcontractor, free FreeAgent through your bank is genuinely enough — and the people telling you Xero is "worth it at your size" are mostly describing what becomes true later, not now.
What FreeAgent covers well at your scale:
- Invoicing and getting paid, including automated payment reminders
- - Expenses and bank feeds
- - VAT returns and MTD-ready record keeping
- - Self Assessment estimates and year-end accounts support for micro businesses
It is built for exactly this: small UK service businesses, freelancers and contractors. For a handful of invoices a month and simple expenses, you won't hit its limits.
What Xero does better (the honest list):
- Integrations: Xero connects to a far larger app ecosystem — project management, CRM, deeper payroll add-ons. FreeAgent's integrations are thinner.
- - Multi-currency: if you ever bill clients in dollars or euros, Xero handles multi-currency invoicing and bank accounts far more gracefully.
- - Payroll depth: Xero's payroll options are stronger if you take on staff, which is worth remembering now you've got your first employee.
- - Ecosystem familiarity: more accountants and bookkeepers know Xero inside out, which can matter if you hire one later.
One caveat on "free via your bank": check whether it stays free if you ever switch banks — you're tying your bookkeeping to one banking relationship, and some banks only offer it for a limited period. Read the terms.
My practical take: start with the free FreeAgent, run it properly for a year, and reconsider only if you find yourself wishing for an integration it doesn't have, billing in foreign currencies, or building a bigger team. Pick based on where the business is going, not on price alone — but at your current size, price is a perfectly good reason to take the free option.
