Clearbooks
UK cloud accounting for small businesses and sole traders.
About Clearbooks
Clearbooks handles the UK compliance tasks that generalist cloud accounting platforms treat as bolt-ons: VAT return submission direct to HMRC, CIS deduction tracking for contractors and subcontractors, and MTD-compatible reporting built in from the ground up rather than retrofitted. Day to day, you raise invoices, reconcile bank feeds via Open Banking, match transactions, and file your VAT return without leaving the platform. For a sole trader billing clients and managing quarterly VAT, that covers most of what you need. It fits UK-based sole traders, freelancers, and small businesses with up to a handful of employees who want HMRC compliance handled without paying Xero or QuickBooks prices for features that have no relevance to a small UK operation. Construction businesses using CIS will find the deduction management more thoughtfully implemented here than in the larger platforms, where CIS is often an add-on. The weak spots are real: the integration library is thin outside of Open Banking, PayPal, and Stripe, so if your practice runs on Hubdoc, Dext, or a niche CRM, expect manual workarounds. Reporting depth is limited compared to Xero. There is no free tier, which makes evaluation a commitment. Firms that have already embedded QuickBooks or Xero into their workflow will find little reason to switch unless CIS compliance is a recurring headache.
Best for
UK small businesses and sole traders wanting affordable cloud accounting with HMRC compliance
Key Features
- Automated UK VAT return filing
- CIS compliance and deduction management
- MTD (Making Tax Digital) ready reporting
- Bank reconciliation with transaction matching
Pros & Cons
Pros
- Submits VAT returns directly to HMRC through MTD-compliant filing, no third-party bridging software needed
- CIS deduction tracking and monthly statements are built into the core product, not sold as an add-on
- Open Banking feeds pull transactions automatically, reducing manual bank entry for sole traders without complex multi-currency needs
- Priced below Xero and QuickBooks at the entry tier, which matters for sole traders with straightforward books
- Purpose-built for UK tax rules, so MTD obligations and VAT scheme options are not afterthoughts
- Invoice creation and client management cover the full billing cycle without requiring a separate invoicing tool
Cons
- No free trial or free tier means you pay before you can properly evaluate whether the workflow fits yours
- Integration library is narrow — no native Dext or Hubdoc connection, which is a problem for practices that rely on receipt capture tools
- Reporting is functional but thin; Xero and QuickBooks produce more granular management accounts and custom reports
- Small user community means fewer accountants familiar with the platform, which complicates handoffs to new bookkeepers or advisors
- Multi-currency support is limited, so any sole trader billing overseas clients in foreign currencies will hit friction fast
- No payroll module built in, so businesses with employees need a separate payroll tool regardless of plan
Ledger Brief Take
This is classic UK-focused accounting software rather than an AI tool — it's built specifically for navigating HMRC's compliance maze with MTD and CIS requirements that larger platforms often handle as afterthoughts. The value proposition is being purpose-built for UK sole traders and small businesses who need those specific compliance features without paying for enterprise bells and whistles they'll never use.
Frequently Asked Questions
Common questions accountants ask about Clearbooks.
How does Clearbooks pricing work and what does the entry plan include?
Clearbooks starts at £10 per month (approximately $12 USD). The entry plan covers invoicing, bank reconciliation, VAT return filing, and MTD-compliant reporting. CIS features are available on the platform but confirm current plan tiers on their site, as feature allocation across plans has changed. There is no free tier.
How does Clearbooks compare to Xero for a UK sole trader?
Xero costs more at entry level and is built for a global market, meaning UK-specific features like CIS are add-ons or require third-party apps. Clearbooks is cheaper and treats UK VAT and CIS as core features. Xero wins on integrations, reporting depth, and accountant familiarity. If your accountant already uses Xero, switching to Clearbooks creates friction.
Does Clearbooks handle CIS for construction businesses?
Yes. Clearbooks tracks CIS deductions, generates monthly subcontractor statements, and handles the compliance paperwork for businesses operating under the Construction Industry Scheme. This is one of the stronger reasons to choose it over QuickBooks or FreeAgent, where CIS handling is less developed.
Is Clearbooks MTD compliant for VAT?
Yes. Clearbooks submits VAT returns directly to HMRC through the MTD API, so you do not need bridging software. It supports standard, flat rate, and cash accounting VAT schemes. MTD for Income Tax compatibility is listed on their roadmap — verify current status before committing if that is your primary requirement.
Can my accountant access my Clearbooks account?
Yes. Clearbooks allows you to invite an accountant or bookkeeper with their own login. Access is role-based. The limitation is that fewer UK accountants are trained on Clearbooks compared to Xero or QuickBooks, so if you switch advisors, onboarding your new accountant may take longer.
Does Clearbooks integrate with Dext or Hubdoc for receipt capture?
No native integration exists with Dext or Hubdoc. This is a genuine gap. Sole traders who photograph receipts and want automatic extraction and categorisation will need to handle that outside Clearbooks or use a manual upload process. For practices built around Dext, this is a dealbreaker.