Best accounting software for contractors
Contracting through a limited company brings a specific set of needs a generic small business tool doesn’t always handle well: IR35 considerations, dividend planning, and often irregular invoicing between contracts.
FreeAgent is the name that comes up most
It’s popular with contractors specifically because of how well it handles the salary and dividend split, Corporation Tax estimates, and Self Assessment, all of which matter more to a contractor running their own limited company than to a typical small trading business.
What to look for beyond the big name
Good expense tracking that separates allowable business costs cleanly, since contractors often have more categories of legitimate expense than a typical employee ever thinks about. A clear view of retained profit versus what’s been drawn, so you’re not caught out at year end. And ideally, straightforward invoice templates since contractors often invoice the same client repeatedly with only minor changes.
IR35 doesn’t live in accounting software
Worth being clear on this: no accounting platform determines your IR35 status, that’s a separate legal assessment of the contract itself. Your accounting software just needs to handle the tax consequences cleanly once your status is known.
The honest recommendation
Start with FreeAgent if you’re a straightforward one-person contracting limited company, it’s built almost exactly for this. Talk to an accountant early, IR35 and salary/dividend planning genuinely benefits from a proper conversation rather than software defaults.
Where we mention a paid product we may earn a fee if you sign up, at no cost to you, and it never changes what we recommend. Pricing and features change, always check the provider’s own site for current details. This is information, not accounting advice.