FreeAgent Accounting Software - is it Worth Using in 2025?

FreeAgent is a cloud-based accounting software designed for UK businesses to make everyday accounting easier for UK businesses. Over 200,000 customers use FreeAgent and it was awarded as Friendliest Software of the Year by Institute of Certified Bookkeepers Luca Awards 2024. It has everything you need is in one place: invoices, expenses, taxes, reports, or whatever you’re looking for. There’s no more searching through spreadsheets or dealing with piles of paperwork. Just log in and instantly see your financial position.

It’s tailored for the UK, so all the tax features match what freelancers, sole traders, contractors, and small business owners actually require. You don’t need to be an accountant to use it. FreeAgent links directly to HMRC, letting you manage VAT returns, Self Assessment, and Corporation Tax right from your dashboard. There’s no need to switch between different systems.

Freelancers and contractors benefit from real-time tax estimates, so they always know how much to save without unwelcomed surprises when tax is due. Small business owners appreciate the automatic bank feeds, quick invoicing, and clear reports that make planning and managing cashflow far simpler. Plus, many UK banks offer FreeAgent for free with their business accounts, which is a great perk.

This guide explains how FreeAgent Accounting Software works, its key features, pricing, and where it stands out or falls short. By the end, you’ll know if it’s right for your business and how it can help you keep control of your finances.

What is FreeAgent?

FreeAgent is a leading accounting software used by over 150,000 small businesses, freelancers, and contractors in the UK. It brings together your invoicing, expenses, bank transactions, and taxes into one easy-to-use dashboard, giving you a clear overview of your finances, even if you have no accounting experience.

Say goodbye to old-fashioned accounting software that requires complicated downloads, constant updates, or an accounting degree to figure out. FreeAgent operates directly in your web browser, updates automatically, and connects seamlessly to your business bank account. You avoid the hassle of manual data entry and endless admin. In short, it saves you valuable time.

Because it’s cloud-based, you can access your accounts whenever and wherever you need from any device with an internet connection. Need to send an invoice or review expenses while out and about? It’s easy. And since FreeAgent is recognised by HMRC, it manages Making Tax Digital for VAT and keeps you compliant with UK tax regulations.

History of FreeAgent

Developed and based in the UK, FreeAgent has built a solid reputation since its launch in 2007. The company started in Edinburgh, Scotland, with a focus on creating a user-friendly accounting solution. Over the years, FreeAgent has grown significantly, earning a reputation for its user friendly interface and robust features. In 2018, it was acquired by NatWest Group, which further strengthened its position and reliability. Thousands of UK businesses trust FreeAgent to help them stay organised, compliant, and in control of their finances.

FreeAgent Features

FreeAgent Software truly understands what UK freelancers, contractors, and small businesses need to keep accounting smooth. You get all the essential features for managing your income, expenses, and taxes, but without getting lost in unnecessary features.

Invoicing and Income Tracking

Creating invoices with FreeAgent is quick and easy. You can customise invoices with your own branding like logo, payment terms, everything you want, and send them directly to clients by email. If you have clients you bill regularly, you can set up automatic reminders for recurring invoices and let FreeAgent handle the process automatically.

When payments come in, FreeAgent matches them to the correct invoices and keeps your income well organised. It even sorts everything automatically, so you don’t have to spend time sifting through records. If you work with international clients, you can invoice in other currencies, but everything still balances in pounds.

Expense Tracking

Recording expenses in FreeAgent is simple. Take a photo of your receipt on your phone or upload it from your computer, and that’s it. All your documentation is stored in one place - no more lost receipts or last-minute searching.

If you drive for work, there’s built-in mileage tracking. Just enter your trips, use the official HMRC mileage rates, and the figures go straight into your accounts. FreeAgent also shows you which expenses are claimable, so you’re not left guessing or hunting for information.

Tax and HMRC Features

FreeAgent makes tax management simple. It covers VAT, Self Assessment, and Corporation Tax calculations for you, so you don’t have to stress about the figures. Need tax reports? Just a couple of clicks and you’re good to go. Following HMRC rules suddenly feels much easier.

The software is fully MTD-compliant, so you can submit your VAT return directly to HMRC from the platform. Your income tax submissions are accurate and filed on time.

FreeAgent includes a payroll feature that takes care of managing employee salaries, PAYE, and National Insurance. It generates payslips automatically and keeps you on top of every payroll task, ensuring your team is always paid correctly and on time.

Bank Integration and Reconciliation

FreeAgent integrates seamlessly with most UK banks. Just connect your business bank account and FreeAgent will automatically import your transactions. No manual entry needed, just let the bank feed do the work.

With real-time transaction imports, you no longer have to manually enter your financial data. FreeAgent automatically imports your bank transactions, saving you time and reducing errors. You can then reconcile these transactions with your accounts effortlessly.

Reporting and Insights

FreeAgent’s reports are easy to understand, even if you’re not into numbers. If you want to see how your cashflow or profits are doing over time, the answers are right there - clear and straightforward, so you can plan and make informed decisions.

You can see your tax liabilities at a glance, no unpleasant surprises when tax season comes around. When the tax year ends, everything’s already organised and ready. Whether you hand things to your accountant or submit yourself, you’re fully prepared.

Project Management and Tracking

With FreeAgent, you manage client work by project. Everything from income, expenses, hours, to tasks gets sorted under each job, so you always know where things stand and how much you’re earning. Track your billable hours right next to the ones you can’t invoice for. Then, review project reports to see if you’re actually making a profit. It’s ideal for freelancers and small businesses who want to monitor client work closely, all in one place, without switching between multiple apps.

FreeAgent Benefits for UK Businesses

FreeAgent Accounting Software offers numerous benefits that can make managing your business finances simpler and more efficient. Here are some key advantages of using FreeAgent:

• Easy to use - You Get a clear dashboard showing income, expenses, profit, and tax, all in one place. No accounting knowledge needed to get started.
• Built for UK tax rules - Supports Self Assessment, VAT returns, Making Tax Digital and Corporation Tax tracking.
• Real-time tax estimates - See exactly how much tax to set aside for every pound you earn. No more guessing, just improved cash flow.
• Time-saving automation - Bank feeds, invoice matching, expense tracking, all runs automatically, so you spend less time on admin.
• Easy expense and mileage tracking - Snap a picture of your receipts, log your mileage, and your records stay organised all year.
• Accountant-friendly - Give your accountant access at no extra cost. Year-end just got easier for both of you.
• Mobile Accessibility for On-the-Go Management - Take care of your business wherever you are with FreeAgent’s mobile app. You stay connected to your business and always keep up with your finances, no matter where you work.
• Good value for money - All key features included in the standard plan, with free access available through partner banks.
• Ideal for small UK businesses - Whether you’re a freelancer, contractor, sole trader, or running a small limited company, FreeAgent software is the perfect fit.

Who Can Use FreeAgent Software?

FreeAgent Accounting Software is for businesses of every size. It is particularly well-suited for:

• Freelancers - If you’re a freelancer managing invoices, expenses, and tax planning, FreeAgent brings everything together. View your income and outgoings at a glance, along with real-time tax estimates, so you can plan ahead without unexpected surprises.
• Sole traders - Sole traders benefit from simple income tracking and reliable Self Assessment support. With FreeAgent, logging expenses, tracking profits, and seeing upcoming tax bills before they arrive is much easier.
• Limited company directors - Running a limited company? FreeAgent manages salaries, dividends, VAT, and Corporation Tax estimates for you. The tax timeline shows what’s due and when, helping you stay ahead of payments.
• Contractors - Contractors appreciate FreeAgent because it’s designed for UK tax rules and provides clear reporting. You can monitor contract income and expenses, and keep on top of your tax duties all year round.
• Small business owners - Small business owners rely on FreeAgent to handle everyday finances like bank transactions, cashflow reports, and more, without being buried in admin.
• Startups - Startups enjoy an all-in-one platform that scales with them. FreeAgent keeps finances organised from day one, making it easier for new businesses to keep progressing.
• Partnerships -With FreeAgent, partnerships can easily track shared income, expenses, and profits. You get a clear picture of your business’s performance, with no guessing involved.
• Accountants and bookkeepers - Accountants and bookkeepers use FreeAgent to work closely with clients, review figures in real time and manage accounts more efficiently.
• Landlords - Landlords can use FreeAgent to track rental income, record property expenses and prepare figures for Self Assessment.

FreeAgent Pricing

FreeAgent keeps its pricing simple, and that’s a big reason why small businesses in the UK like it. There are no confusing pricing tiers or hidden limits.

Freeagent has monthly packages for limited company, partnership or LLP, sole traders, landlords, and accountants and bookkeepers. The packages cover invoicing, expenses, bank feeds, VAT, tax reporting, and the whole lot. No surprise fees for the features you actually use.

Many UK business owners get FreeAgent for free through selected partner banks.If you bank with NatWest, Royal Bank of Scotland, Ulster Bank, or have certain Mettle accounts, FreeAgent is bundled with your business account. That saves you hundreds of pounds every year, which is a big win for freelancers, contractors, and small businesses.

Is FreeAgent good value for money?

For UK freelancers and small businesses, definitely. FreeAgent is designed for UK tax rules, so you don’t have to fuss with add-ons or third-party solutions. And if you get a free account through your bank, it’s one of the most affordable ways to manage your accounting. Even if you pay the full price, most users find the time they save and the peace of mind they get are well worth it.

If you’re already using FreeAgent and like its features, you might wonder how it compares to other accounting software. Check out our articles on FreeAgent vs Xero and FreeAgent vs Quickbooks where we compare all three accounting software. We’ll help you decide which one fits your needs better by looking at their strengths, weaknesses, ease of use, and cost.

Do You Still Need an Accountant with FreeAgent?

FreeAgent is a solid tool, but it’s not a substitute for having an accountant on your side. It handles everyday tasks like sending invoices, tracking your expenses, and showing you clear, up-to-date figures. But an accountant brings real expertise, double-checks your work, and gives advice that software just can’t provide.

What FreeAgent cannot do

FreeAgent cannot create custom tax strategies, guide you through tricky transactions, or help you restructure for better tax efficiency. FreeAgent just sticks to the instructions you set. It can’t tell you if a decision is actually the best for your business.

How accountants use FreeAgent with clients

Accountants work directly inside FreeAgent with their clients. They review transactions, tidy up entries, prepare accounts, and submit returns using the same live information. No more endless emails or hunting for figures. Everyone sees the same data, and accountants can catch issues early, not just at year-end.

Benefits of pairing software with expert advice

Combining FreeAgent with a skilled accountant is the best approach. The software takes care of admin tasks, while your accountant zeroes in on advice, tax planning, and making sure you’re following the rules. That partnership reduces errors, helps you make smarter decisions, and gives you more confidence in your finances. For most UK businesses, using both is far more effective than relying on one alone.

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Join FreeAgent Experts, Join GoForma

If you want to experience the benefits of FreeAgent without any extra cost, consider joining GoForma Accounting. We offer FreeAgent access as part of our accounting packages. We bring years of experience in providing comprehensive accounting and tax services to UK businesses and individuals. GoForma is the trusted and accredited FreeAgent accountants and platinum partner in the UK offering expert accounting services combined with the powerful features of FreeAgent to ensure your business's financial health and compliance.

Frequently Asked Questions on FreeAgent

What is FreeAgent?

FreeAgent is an online accounting software designed for freelancers, small businesses, and other professionals. It helps manage invoices, expenses, projects, and taxes efficiently.

How much does FreeAgent cost?

FreeAgent offers various pricing plans based on your business type. There are plans for sole traders, partnerships, landlords and limited companies. You can also start with a 30-day free trial to explore the software.

Can FreeAgent help with tax compliance?

Yes, FreeAgent automatically calculates VAT, Self Assessment, and Corporation Tax. It is also compliant with the UK’s Making Tax Digital (MTD) requirements, allowing you to file VAT returns directly to HMRC.

How does FreeAgent integrate with my bank?

FreeAgent can sync with most UK banks, allowing real-time transaction imports. This integration helps you keep your financial data up-to-date and simplifies bank reconciliation.

Is there a mobile app for FreeAgent?

Yes, FreeAgent has a mobile app that allows you to manage your finances on the go. You can create invoices, capture receipts, and monitor your financial status from your mobile device.

How can I get started with FreeAgent?

You can start by signing up for a 30-day free trial on the FreeAgent website. During the trial, you can explore all the features and see how they fit your business needs. Also, you can avail GoForma Accounting service to get FreeAgent access at no extra cost.

Who can use FreeAgent?

FreeAgent is ideal for freelancers, sole traders, small business owners, contractors, partnerships, limited companies, landlords, and accountants. It provides tailored features to meet the needs of various types of users.

Which tax returns can be submitted through FreeAgent?

You can submit self assessment tax returns and VAT returns directly to HMRC through FreeAgent.

Does FreeAgent replace an accountant?

No, FreeAgent does not replace an accountant. It handles day-to-day accounting, while an accountant provides advice, checks and tax planning based on your business needs.

Which banks provide Free access to Freeagent with business bank account?

You can get FreeAgent for free while you retain a business bank account with NatWest, Royal Bank of Scotland or Ulster Bank, or make at least one transaction a month through a Mettle bank account.

What banks does FreeAgent integrate with?

FreeAgent supports over 40 feeds from banks worldwide. Check their full list of bank feeds which are available to set up via an Open Banking bank feed or a third-party API integration.

Is FreeAgent approved by HMRC?

Yes, FreeAgent is approved by HMRC. It is recognised software for UK tax tasks and works with current HMRC systems, including online submissions.

Can I switch to FreeAgent from another platform?

Yes, you can move to FreeAgent from another accounting platform. You can import key figures and start using FreeAgent from a chosen date, with help from guides or an accountant if needed.