FreeAgent

FreeAgent is UK accounting software for freelancers, sole traders, partnerships, limited companies, landlords and micro businesses. It runs double-entry bookkeeping underneath a deliberately plain interface, so a user records an invoice or an expense without ever seeing a debit or a credit while the ledger stays correct behind the scenes. The company is based in Edinburgh and has been owned by NatWest Group since 2018, which determines who gets the product for nothing.

The free arrangement is specific and often misdescribed. FreeAgent is free for customers holding a business current account with a NatWest Group bank, meaning NatWest, Royal Bank of Scotland, Ulster Bank and Mettle. The funded licence is a full one, with the same functionality paying customers receive, applies to all company types including landlords, and lasts as long as the qualifying account is held. For Mettle the condition is at least one transaction a month. NatWest Group customers get no stripped-down version and pay nothing after a trial period.

A common misconception needs correcting directly, because comparison articles repeat it. FreeAgent is not offered free to HSBC business customers. HSBC UK provides its own embedded accounting tool, My Business Finances powered by Sage, with an introductory free period and then a monthly charge. That is a different product from a different supplier. A business banking with HSBC can still buy and use FreeAgent, but it pays the standard subscription.

For everyone else, FreeAgent is a paid subscription split by business structure, with a lower tier for sole traders and a higher one for limited companies reflecting the additional statutory work a company requires. Published list prices have been around £19 per month for sole traders and around £29 per month for limited companies, both excluding VAT, with a 50 percent discount for the first six months. Optional add-ons are priced separately and have included unlimited receipt capture through Smart Capture at roughly £5 per month and an Amazon UK connection at roughly £6 per month. Accountancy practices managing multiple clients use a separate practice arrangement. These figures are revised periodically and promotions run frequently, so current prices should be confirmed on the vendor's pricing page before purchase.

Bank feeds are the operational centre of the product. FreeAgent connects to UK bank accounts through Open Banking, importing transactions automatically and matching them against invoices, bills and expense claims. Unmatched transactions appear in a list where they can be categorized, and repeated patterns are learned. Bank reconciliation is a genuine reconciliation against the statement balance rather than a simple import, which is what makes the year-end accounts defensible.

Invoicing and estimates cover the revenue side. Invoices are created from templates with a logo and payment details, sent by email or as a hosted link, and can include a payment button so clients pay by card. Overdue invoices are chased with automated reminders, part payments are recorded and credit notes are supported. Estimates convert into invoices when work is confirmed. Multi-currency invoicing is available, which matters for freelancers with overseas clients.

Expenses are captured in several ways. Receipts can be photographed through the iOS and Android mobile apps or emailed into the account, and the Smart Capture feature extracts the amounts. Expense claims distinguish between business costs paid personally and costs paid from the business account, a distinction UK tax treatment depends on and one that simpler tools blur. Mileage can be logged and claimed, and expenses feed into the profit and loss position and the tax calculations automatically.

Tax handling is where FreeAgent differentiates itself most clearly from generic bookkeeping tools. It is recognised software for Making Tax Digital for VAT, so returns are submitted directly to HMRC without a bridging tool. It prepares Self Assessment returns for sole traders and partnerships and produces corporation tax estimates for limited companies. A Tax Timeline shows upcoming filing and payment dates with amounts, and running estimates of tax liability are maintained throughout the year rather than appearing as a surprise after year end.

Payroll is included rather than sold as an add-on. FreeAgent runs UK payroll for employees and directors, handling PAYE, tax codes, payslips, Full Payment Submissions to HMRC, and the year-end P60 and P45 process. Many competing packages charge per employee or per payroll run, so bundling payroll into the base subscription materially changes the real cost for a limited company with a director on payroll, which describes a large share of UK micro businesses.

Project tracking and time recording support service businesses. Time can be logged against projects and clients and billed through invoices, and project profitability reports show income against time and expense costs. This is lighter than a dedicated time tracking product such as Harvest, but sufficient for a freelancer or small consultancy billing hours.

Reporting covers the statutory and managerial basics, including profit and loss, balance sheet, cash flow, aged debtors and creditors, VAT summaries and tax estimates. Reports are exportable, and accountants can be given access to the books. FreeAgent also runs a practice offering so accountancy firms can manage multiple client companies from one dashboard, and its large accountant user base means a business can hand its books to an adviser without a migration.

How FreeAgent differs from its rivals comes down to jurisdiction and price. Xero and QuickBooks Online UK are broader, more extensible platforms with larger app marketplaces, more inventory and multi-entity features, and higher entry prices that rise with headcount. Sage and Zoho Books occupy adjacent positions. What none of them can match is a genuinely free full-featured licence for customers of the owner's own banks. For a NatWest, RBS, Ulster Bank or Mettle customer the effective price is zero, which removes the usual cost comparison entirely.

Limitations are real. It is UK-focused, built around HMRC rules, UK payroll and UK banking, so it is the wrong tool for a business filing in another jurisdiction, though a separate US edition with a different feature set and pricing exists and should be evaluated independently rather than assumed equivalent. Inventory and stock management is not a strength, so product businesses with meaningful stockholding will outgrow it. Complex payroll scenarios, multi-entity consolidation and heavy custom reporting are better served by larger platforms. The integration ecosystem is smaller than Xero's.

FreeAgent fits UK sole traders, freelancers, contractors, landlords and one-to-ten-person limited companies that need bookkeeping, VAT filing, Self Assessment or corporation tax estimates and payroll in one place. It fits NatWest Group banking customers above all, for whom it is free. It does not fit businesses outside the UK, companies with substantial inventory, or firms needing deep project delivery tooling.

Against Xero and QuickBooks Online, FreeAgent is narrower and cheaper, often free, and stronger on bundled payroll and direct UK tax filing, while weaker on integrations and scalability. Against Sage it is generally easier for a non-accountant to operate day to day. Against Harvest it is complementary, since Harvest handles time and client invoicing while FreeAgent handles the books and the tax. For a UK micro business banking with NatWest Group there is little financial reason to look further. For everyone else, the question is whether bundled payroll and HMRC filing are worth the subscription against a larger platform that will still fit in five years.