Xero Price Increase 2025 and Alternatives

Xero are increasing their prices again by up to 12%, effective from September 2025. If you’re looking for Xero’s pricing changes for 2026, please visit Xero’s Price Increase. We’re disappointed that Xero has increased most of its prices again, so soon after the potentially huge increases due to price/package changes in the previous year. In fact, Xero are still phasing in those changes now, so you would think they would have held off until next year.

It’s not all bad news because the cheapest package prices will not increase in 2025. However, those packages will potentially become more restrictive once the previous year’s changes are phased in. The other more expensive packages have increased by between 6% and 12%.

Why are Xero’s Prices Increasing Again?

Xero say that they have continued to invest heavily, making the software more reliable, secure, and useful. The only significant change we’ve noticed is the addition of JAX (Just Ask Xero) which could be a useful AI tool to get Xero to do things for you like add an invoice. However, Xero is easy to use, and JAX can only do simple tasks, so we’re not convinced that this is enough to justify another inflation busting price increase. Xero have made a new interactive tool called The Long and the Short of it to show the changes it has made, so you can judge for yourself.

There is a new Simple plan, with just enough permissions for small sole traders and landlords to comply with Making Tax Digital for Income Tax when that starts in April 2026. It’s competitively priced at £7pcm plus VAT. However, it can’t be used if you are VAT registered and quotes and invoices are limited to 10 per month.

In our opinion Xero remains the best online accounting software. It’s much easier to use than the others. So if you can afford to pay their prices, it’s usually worth it due to the time it will save you.

The Xero Price Increase

Xero’s prices will increase from 1 September 2025, technically 11 days less than 1 year since the last one. Also, the previous year’s changes to the plans are still being phased in. These changes mean you could have to upgrade your plan. Here are the Xero Price increases for 2025 and the past few years for their main plans.

The Xero Plans

Ledger: A very basic version of Xero without bank feeds. You can import or manually add bank transactions, then categorise them. That’s about it.

Simple: Sole traders and landlords only. Create quotes and 10 invoices per month. Payroll, Pay Bills, Multi-currency, Expenses, Projects and Analytics Plus not available.

Ignite (Starter): Create 20 quotes and invoices, and 10 bills per month. Payroll is £1.50pcm per person. Multi-currency, Expenses, Projects and Analytics Plus not available.

Grow (Standard): Unlimited quotes, invoices and bills. Expenses for 1 plus £2.50pcm per extra person. Payroll for 1 plus £1.50pcm per extra person. Pay directly from Xero for up to 5 bills per month plus £0.20 per additional bill payment. Multi-currency, Projects and Analytics Plus not available.

Comprehensive (Premium): Expenses for 5 plus £2.50pcm per extra person. Payroll for 5 plus £1.50pcm per extra person. Pay directly from Xero for up to 10 bills per month. Multi-currency and Analytics Plus included. Projects not available.

Ultimate: Expenses for 10 plus £2.50pcm per extra person. Payroll for 10 plus £1.50pcm per extra person. Projects for 10 plus £5.00pcm per extra person. Pay directly from Xero for up to 15 bills per month. Multi-currency and Analytics Plus included.

Alternatives to the Xero Price Increase

Use CloudBook Online Accountants

With CloudBook Online Accountants, unlike other accountants, you can use whichever software you prefer. We don’t make you use Xero’s accounting or payroll software, so you don’t have to pay their high prices. As well as that, you’ll probably save on accountancy fees too, with our low fixed monthly fees.

Downgrade Xero Plan

To avoid the price increase, could you downgrade your Xero plan? Simple could be all you need as a sole trader or landlord. The Ignite plan now has unlimited bank transactions and allows up to 20 sales invoices and 10 bills per month. Instead of using bills you could just attach them to the bank transaction. The Grow plan is mostly only missing multi-currency which is only essential if you have foreign bank accounts. If you have few foreign currency transactions you could convert them manually.

Use Move My Books

Move My Books is a free service that helps you move your accounting data to Xero, QuickBooks or Sage Accounting. This could be useful if you are thinking of moving from Xero to QuickBooks or Sage.

Pandle

Pandle is unlimited and comes with multi-currency and bank feeds for £5pcm. We can get it for £2.50pcm. It’s relatively new, sometimes slow, and takes a while to get used to. However, it should cope with most things you use Xero for.

QuickBooks

QuickBooks is our next most popular software after Xero. It does most things that Xero can do and is quite easy to use once you get used to it. Their Self-Employed package is £12pcm, Simple is £16pcm, Essentials is £33pcm, Plus is £47pcm. We may be able to arrange a discount if enough clients ask for it.

FreeAgent

FreeAgent is geared towards small business and freelancers. Natwest, RBS and Mettle bank customers can get it for free. We can get it for our clients for £23pcm. Or it costs £33pcm or less if you pay annually.

Kashflow

Kashflow is less popular than it used to be and we no longer have any clients using it. However, if you have straightforward accounting transactions, it can work well for you. Starter is £11.50pcm, Business is £23.50pcm or with payroll is £31.50pcm.

QuickFile

Quickfile is used by a few of our clients. It’s less easy to use but it can be free if you have less than 1000 entries per year, otherwise it’s just £60pa pls VAT. If you want automated bank feeds, that’s an extra £15pa.

MyT

MyT accounting is a new software with a built-in receipt reader using AI to categorise your costs automatically. The Standard subscription is £10pcm, Plus is £20pcm and Pro is £30pcm.

Sage Accounting

From our experience Sage have struggled to keep up with their online competition. As such, we still don’t have any clients using Sage at the time of writing but we’d be happy to help you use it. However, it’s not much cheaper than Xero. The Start price is £18pcm. Standard is £39pcm and Plus is £59pcm.

Spreadsheets

If you’re not VAT registered, you could use a spreadsheet (e.g. Excel, Google Sheets, Numbers) to do your accounting. While we prefer online accounting software, if your accounting transactions are straightforward, a tidy spreadsheet would be ok. All transactions need to be categorised. Read more on our bookkeeping using a spreadsheet page.

Other Online Accounting Software

There are many other online accounting software platforms available. We’ll consider doing your accounts etc using any online accounting software. Look out for ones that can link to UK bank accounts and are MTD compliant.