Octobooks vs Xero: prices, MTD and AI compared
Short answer
Choose Xero if you need HMRC-recognised filing and payroll in one app today. Octobooks suits you if you want your own AI, such as Claude, to keep the books in a ledger through a connector. Octobooks is not yet on HMRC's list, so it does not send VAT or MTD submissions.
Side by side
Xero facts from its UK pricing page, Octobooks facts from ours, both seen 4 November 2026. Prices are monthly and before VAT.
| Xero | Octobooks | |
|---|---|---|
| Entry price | Ignite £18 | Solo £19, sole traders |
| For a limited company | Grow £39, Comprehensive £55, Ultimate £70 | Starter £49 |
| Introductory offer | 90% off the base subscription for 6 months with Xero's code | 7 days free, no card |
| Invoices | Ignite: 20. Grow and above: unlimited | No limit named on the pricing page |
| MTD and VAT filing | HMRC-recognised, sends VAT returns, all plans MTD for Income Tax ready | Prepares the figures. You submit through a listed product |
| Payroll | Included for 1, 5 or 10 people on Grow, Comprehensive, Ultimate; per person on Ignite | Not named on our pricing page |
| Company accounts and tax | Add-on, £120 a year | Year end and annual accounts in Starter |
| How you work | Xero's screens, with its AI partner JAX | Your own AI through the MCP connector, with a page beside the chat |
| API | Not read for this table | REST API with webhooks from Solo |
What a year costs: a worked example
A limited company wants unlimited invoices and takes Xero's offer, ignoring add-ons and usage charges. Xero Grow: 6 months at £3.90 is £23.40, then 6 months at £39 is £234. That is £257.40 in the first year and £468 in the second. Octobooks Starter: 12 months at £49 is £588 in both years. Xero costs less on these list prices, and it includes filing. The case for Octobooks is the way of working, not the price.
Where each one fits
Xero fits better if:
- you need VAT returns and MTD updates sent from one product today
- you want payroll in the same subscription
- you want an established app that needs no AI assistant to run
Octobooks fits better if:
- you already work in Claude or another MCP client and want it to keep the books
- you want to set switches for what the AI may release alone, with every entry in an audit trail
- you run companies in the UK, Germany and Austria from one place
Moving from Xero
Octobooks reads Xero exports and checks the balances with you: bring your old books. You can take everything out again at any time: download everything.
For sole traders and landlords, start with Do I need MTD? and the eight software tests.