Powered Now vs Xero for Making Tax Digital
By the selector's own rules, Powered Now and Xero both work for sole traders, so the choice comes down to the five points where they differ. Xero offers support for more than one property, support for jointly owned property, bank feeds and access for an accountant, which Powered Now does not. Their cheapest plans are listed as £28 plus VAT a month (Business (quarterly updates only)) for Powered Now and £7 plus VAT a month (Simple) for Xero.
Powered Now suits sole traders in the trades who want quotes, invoices and MTD updates in the same app, trade businesses with a small team who need certificates and custom forms as well and VAT-registered tradespeople who want VAT returns from the Professional plan. Xero suits landlords with multiple properties, sole traders who also need payroll and anyone already using an accountant on Xero.
The facts on this page come from each provider’s own pages and from HMRC’s software list, and how we compare products explains how we check them.
If you are thinking of moving from one to the other, the guide to changing your MTD software explains what GOV.UK says about when you can move and what happens to your records.
Where they differ
These are the points where our checks of the two products came out differently. A “No” means we did not find that feature on the provider’s own pages when we last checked them. Where we had nothing to go on for one of the two, we leave the point out here rather than guess.
| Point | Powered Now | Xero |
|---|---|---|
| Cheapest plan | £28 plus VAT a month (Business (quarterly updates only)) | £7 plus VAT a month (Simple) |
| More than one property | No | Yes |
| Jointly owned property | No | Yes |
| Bank feeds | No | Yes |
| Accountant access | No | Yes |
On the other points we compare (free plan, holiday lets and former FHL, self-employment income, receipt capture and phone apps), they give the same answer, or at least one provider does not say. The full list is under each product’s own page.
Both send MTD for VAT returns, from different plans: Powered Now from the Professional (quarterly updates only) plan and Xero from the Ignite plan.
What HMRC’s software list says about both
HMRC’s list marks each feature as available now or intended for later. This is what HMRC’s list says, not something we have tested ourselves. Where HMRC lists a product under more than one name, we show the strongest answer and the listing it comes from.
| Feature | Powered Now | Xero |
|---|---|---|
| Your tax return and other income | ||
| Sending your tax return | Intended | Available |
| Foreign property | Available | Available |
| Construction Industry Scheme (CIS) | Intended | Availablesince 16 October 2026 |
| Employment (PAYE) | Intended | Intended |
| UK dividends | Intended | Availablesince 16 October 2026 |
| UK interest | Intended | Availablesince 17 July 2026 |
| Capital gains | Intended | Intended |
| How it works | ||
| Bridging software that connects to your records | Not stated | Not stated |
| Calendar update periods (1 April to 31 March) | Available | Available |
| A free version | Not stated | Not stated |
| Welsh language | Not stated | Not stated |
| Accessibility | ||
| Blindness or impaired vision | Available | Not stated |
| Deafness or impaired hearing | Available | Not stated |
| Motor or physical difficulties | Available | Not stated |
| Cognitive impairments | Available | Not stated |
This is HMRC’s list as it stood on 30 October 2026, at HMRC’s commit 201b34e. A date beside a feature is when HMRC’s list changed it from intended to available. HMRC’s software finder shows the current answers. How we read HMRC’s list
Does HMRC’s software list show Powered Now and Xero as available for sending your tax return?
For sending your tax return, HMRC’s software list as it stood on 30 October 2026 marks it “Intended” for Powered Now and marks it “Available” for Xero.
Does HMRC’s software list show a free version of Powered Now or Xero?
For a free version, HMRC’s software list as it stood on 30 October 2026 says nothing either way for Powered Now and says nothing either way for Xero.
How many features does HMRC’s software list mark as available for Powered Now and Xero?
HMRC’s software list as it stood on 30 October 2026 covers 15 features, and it marks 6 “Available” for Powered Now and 6 “Available” for Xero. For Powered Now, it marks 6 “Intended” and gives no answer on 3. For Xero, it marks 2 “Intended” and gives no answer on 7.
The cheapest plan for your situation
A product’s cheapest plan is not always one you can use, because some plans are only for landlords or only for sole traders. These are the lowest prices the selector would show each reader, as each provider states them. Where a price grows with the number of properties, it is shown as a starting price. The figure over 12 months is the same plan at its regular price, worked out the way the software cost calculator does it.
Powered Now
- For sole traders
- £28 plus VAT a month
- Cheapest plan over 12 months
- £336 plus VATThe monthly price times 12; the provider also bills by the year
We checked Powered Now’s prices on 25 October 2026.
Xero
- For sole traders
- £7 plus VAT a month
- Cheapest plan over 12 months
- £84 plus VAT
We checked Xero’s prices on 25 October 2026.
Xero also works for landlords and people with rental and self-employment income.
Notes from our checks
Powered Now
Powered Now's MTD page describes handling the quarterly submissions to HMRC, but we did not find a way to send the final declaration from Powered Now, and when we looked at HMRC's software list on 25 October 2026 it still showed the year-end return as intended rather than available. So we name each plan as quarterly updates only. The pricing page says MTD for Income Tax is built into every plan, including Business. HMRC's list shows UK property income as available for Powered Now, but its own pages describe trade work only and say nothing about rental income records, so we mark the plans as unsuitable when property income is in the picture until Powered Now's pages say otherwise. The app works on PC, Mac, iPhone, iPad and Android. Receipt scanning comes with Premium only. We did not find a bank feed, mileage tracking, accountant access or anything about furnished holiday lets; the Xero and QuickBooks integrations on Professional and Premium pass figures to an accountant's own software. We checked this on 25 October 2026.
Xero
Regular prices include the September 2026 increase. Xero advertises one month free or 90% off for the first six months for eligible new customers. Simple is for non-VAT-registered businesses. Payroll, Expenses and other add-ons depend on the plan.
Neither product is ranked above the other here: the page sets out what each provider says so you can weigh it against your own situation. How we compare products