Start with three things: Microsoft 365 Business Basic for email and files at £5.40 per user per month, a UK accounting package that fits your business structure, and one specialist tool for the work that earns your money. Add a CRM, project tool or job-management app only when a specific task needs it. Prices below were checked on 2 November 2026 and exclude VAT unless stated.
What types of software do UK small businesses actually need?
Most small firms need five kinds of software, in roughly this order. Collaboration comes first (email, calendar, shared files, video calls). Accounting comes second, because it carries your VAT, payroll and year-end obligations. After that come customer management, delivery or job tracking, and, for shops, point of sale.
Buy the next layer only when a task is failing. A five-person agency rarely needs a service desk, and a trades firm rarely needs a project board. Matching the tool to the failing task keeps the bill and the training burden small.
| Business type | Start with | Add when needed |
|---|---|---|
| Sole trader or one-person company | Microsoft 365, FreeAgent or Zoho Books | A CRM once follow-ups slip |
| Agency or consultancy | Microsoft 365, Xero | A CRM, then project tracking |
| Trades or mobile service firm | ServiceM8, an accounting package | Staff scheduling and forms |
What does business productivity software cost in the UK?
Microsoft 365 Business Basic costs £5.40 per user per month on an annual subscription that renews automatically, and the price does not include VAT. It includes 1 TB of cloud storage per user and web and mobile versions of Word, Excel, PowerPoint and Outlook.
That last detail matters. Business Basic does not include the desktop versions of the Office apps, so a team that works offline in Excel should compare a higher plan before buying. Paying twice for chat, storage or task tools that overlap is the most common waste in small-firm software budgets.
How much does UK small business accounting software cost?
Accounting is where UK rules and business structure should drive the shortlist. Xero's UK plans run from £18 a month for Ignite to £70 a month for Ultimate, excluding VAT. Ignite includes quotes and 20 invoices, and enters 10 bills, so a firm that sends more than that should price the next plan up rather than budget at £18 indefinitely.
Xero UK plans, monthly price excluding VAT
Standard monthly price of each Xero UK plan after any introductory offer.
View the data
| Category | £ per month |
|---|---|
| Ignite | £18.00 |
| Grow | £39.00 |
| Comprehensive | £55.00 |
| Ultimate | £70.00 |
FreeAgent lists its limited-company plan at £33 a month excluding 20% VAT. It is free for customers with a business current account at NatWest, Royal Bank of Scotland or Ulster Bank for as long as they keep the account, and for Mettle account holders who make at least one transaction a month. Optional add-ons may be chargeable. FreeAgent also offers UK-based support accountants online or by phone.
Zoho Books has a free plan at £0 for solopreneurs and micro businesses. Its Standard plan is £12 per organisation per month, or £10 a month on annual billing, with three users and email, voice and chat support.
Xero and FreeAgent both advertise introductory discounts for new customers. For example, FreeAgent shows its £33 monthly plan at £16.50 a month for the first six months. These offers are time-limited and were checked on 2 November 2026, so confirm on the brand's own site before you buy. Compare the regular price, because that is what you will pay for most of the contract.
Which software suits trades and mobile service businesses?
A trades firm has a different problem from an office business: getting from a completed job to a paid invoice without retyping. ServiceM8 prices by job volume rather than headcount. The Free plan is £0 a month for one user and 30 jobs a month. Starter is £25 a month for unlimited users and 50 jobs, Growing is £59 for 150 jobs, and Premium is £119 for 500 jobs.
ServiceM8 states that its UK prices are in pounds sterling and do not include VAT, and that it issues reverse charge invoices for the buyer to account for VAT. Confirm that treatment with your accountant. A firm expecting 60 jobs a month should look at Growing rather than assume Starter is enough.
How do I pick software that works together?
Marketplace logos tell you little. Test one complete transaction in a demonstration: create the customer, complete the work, raise the invoice, record the payment and handle an exception such as a part payment. A connector that passes only names and email addresses does not remove re-keying.
Name one person who owns each system, because integration moves management work rather than removing it. Ask who is responsible for set-up, training and fixes after go-live, and get the answer in writing before you sign.
What should I check under UK GDPR before I sign?
The ICO's guidance on restricted transfers says the legal entity you contract with matters. Where the receiving organisation is a separate legal entity, including another company in the same group, you need to consider whether you are making a restricted transfer. For cloud services, the ICO says server location alone does not settle the question.
In practice, ask each supplier which entity signs your contract, who its subprocessors are, and how you export or delete your data. Test administrator access, multifactor authentication and staff offboarding before live use.
What will a sensible software stack cost?
These are calculated examples from the list prices above, not vendor bundles or quotes. They exclude VAT, banking, payment, migration and add-on costs.
| Business | Stack | Monthly total |
|---|---|---|
| Solo limited company with a qualifying bank account | One Microsoft 365 Business Basic licence plus FreeAgent at £0 | £5.40 |
| Solo limited company without a qualifying account | One Business Basic licence plus FreeAgent at £33 | £38.40 |
| Five-person agency | Five Business Basic licences (5 x £5.40) plus Xero Grow at £39 | £66.00 |
| Three-person trades firm | Three Business Basic licences plus ServiceM8 Starter at £25 plus Xero Grow at £39 | £80.20 |
A conditionally free accounting plan changes the total more than anything else in these examples. Per-user licences grow with headcount, while ServiceM8 grows with job volume.
