Most "best accounting software" roundups are written for businesses that never have to think about CIS. For a construction business, that's the wrong starting point. The real question isn't which software has the nicest dashboard, it's which one actually handles CIS deductions, subcontractor verification and reverse charge VAT properly, and what that costs once you add up the bits that aren't included as standard.
What actually matters for a construction business
Before comparing individual products, it's worth being clear on what you're actually screening for, since it's different from what a generic small business needs:
- Real CIS support. Subcontractor verification with HMRC, automatic 0/20/30% deduction rates, and monthly CIS300 return filing, not just the ability to record a payment.
- Job costing. The ability to see profit per contract, not just profit for the business as a whole.
- VAT domestic reverse charge coding. So reverse-charged invoices are treated correctly without you manually overriding the VAT on every one.
- Something you'll actually use. The best CIS engine in the world is worthless if it's too fiddly to open every week.
Xero
Xero calculates subcontractor CIS deductions as standard, but the parts that matter for compliance, HMRC verification, bulk deduction statements, and filing your monthly return, sit behind the CIS Contractor add-on at a further £5 a month. Plans start at £18 a month for Ignite, rising to £65 for Ultimate, so a realistic all-in cost for a CIS-active contractor is closer to £23-plus a month before VAT. Job costing isn't built into the core product either; it needs the separate Xero Projects add-on if you want to track profitability contract by contract.
Where Xero earns its reputation is the ecosystem around it: a huge range of construction-specific add-ons, strong bank feed reconciliation, and, relevant if you work with us, it's what we're set up on as a Xero Certified Advisor. If you want an accountant who already knows the software inside out rather than learning it alongside you, that's a genuine practical advantage, not just a preference.
QuickBooks Online
QuickBooks takes a different approach: CIS for both contractors and subcontractors, including verification, deduction calculation and e-filing to HMRC, is bundled into the Essentials plan at no extra module cost, priced from around £38 a month at standard rates (introductory offers vary). For a business that specifically wants CIS handled without stacking a separate add-on fee on top, that makes QuickBooks marginally cheaper to run than Xero once you've added Xero's CIS add-on. The trade-off tends to be a smaller range of construction-specific third-party integrations compared with Xero's ecosystem.
Sage Accounting
Sage Accounting has full CIS support, verification, deduction calculation and monthly returns filed straight to HMRC, but it's worth knowing before you sign up: CIS is only available from the Standard plan (£30 a month) upwards. The entry-level Start plan, at £15 a month, doesn't include it at all. It's an easy mistake to make if you're comparing headline prices without checking which features sit behind which tier. Sage suits businesses that want phone support included as standard, or that are already in the Sage ecosystem for other reasons.
FreeAgent
FreeAgent has its own CIS features for both contractors and subcontractors, covering deduction tracking, CIS300 returns and payment and deduction statements. The genuinely distinctive thing about FreeAgent isn't a feature, it's the price: it's free, permanently, with no feature restrictions, for business account holders at NatWest, Royal Bank of Scotland, Ulster Bank or Mettle. If you already bank with one of those and you're a smaller subcontractor rather than a multi-site contractor, it's difficult to beat on value, since you get the same CIS functionality as the paid platforms for nothing.
So which one should you actually use?
If cost is the deciding factor and you bank with NatWest, RBS, Ulster Bank or Mettle, FreeAgent is genuinely hard to argue against. If you want CIS included without a separate add-on fee, QuickBooks Essentials is the more straightforward buy. If you're comparing Sage plans, make sure you're pricing Standard, not Start. And if you want the widest range of construction add-ons and an accountant who already knows the software rather than learning it with you, Xero is what we'd point most of our own clients toward, which is exactly why we became Xero Certified Advisors rather than the other way round.
Rehan Razzaq, FCCA
ACCA Chartered Certified and a Xero Certified Advisor, helping UK construction businesses with accounts, tax and financial planning.
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