Which clear books option?

Hi Ian,

To manage your wife's income correctly for tax and Making Tax Digital (MTD) purposes, she will need her own Clear Books account with two separate business entities. HMRC treats self-employment and property as distinct types of income, so they must be kept separate in your records.

Your wife should use Clear Books Basic Accounting. This product is specifically designed for individuals and allows her to manage both income types under one master login.

How to implement the setup

1. Create the Master Account: Your wife should register for her own Clear Books account using her email address.
2. Set up the Sole Trader Business: During registration, she should add her first business as a Sole Trader. This is where she will record her income and expenses for her work as a nanny.
3. Set up the Property Business: Once the first business is created, she can click on the building icon (top right) and select Add business to create a second business using the Property plan.

How to record the income

For the Nanny Income (Sole Trader): She should record all income and business-related expenses directly into the Sole Trader business. She can use one of the following methods:

1. Manually record income & expenses

2. Set up a bank feed

How to explain income and expenses on an imported statement

For the Rental Income (Property): As the property is jointly owned, HMRC does not require you to keep full digital records of every individual receipt. Instead, you only need to record and submit your specific share of the income and expenses. You can input your total share of the property income and expense as a single entry using the Manually Record Income and Manually Record Expenses button on the Dashboard.

Tommy