Sort your receipts and transactions
"I've got a carrier bag of receipts and I've no idea which box half of them go in."
Last checked: 16 October 2026
Short answer
Our pick: Xero. Popular with UK accountants, compatible with Making Tax Digital (MTD), and it suggests bank matches for you. Use a free AI chat to explain categories you're unsure of.
Best free option: FreeAgent is free with some UK business bank accounts (e.g. NatWest, RBS, Mettle).
Time to first result: about 15 minutes.
Copy this prompt
I use [Xero/QuickBooks/FreeAgent]. I'm a [trade] and I am / am not VAT-registered. Explain in plain English which category these transactions most likely belong in and why. If I'm VAT-registered and a receipt shows VAT, split it into the net amount and VAT. List the questions I should ask my accountant. Don't give definitive tax advice. Transactions (no account numbers): [paste]
UK note: never paste bank account numbers, card numbers or your UTR. AI explanations aren't tax advice, so check anything you're unsure of with your accountant.
Worked example result (dummy data). Illustrative example: written by us, not a recorded AI output
A VAT-registered electrician in Manchester pastes: "£48 Screwfix (drill bits, VAT receipt), £320 van insurance, £12 parking at a customer's house."
| Transaction | Likely category | Net | VAT |
|---|---|---|---|
| Screwfix drill bits | Tools and consumables | £40.00 | £8.00 |
| Van insurance | Motor expenses | £320.00 | (none shown) |
| Parking at a job | Travel | £12.00 | (no VAT receipt) |
| Totals | £372.00 net | £8.00 VAT |
Total spent (inc VAT): £380.00. VAT split: £48 ÷ 1.2 = £40 net, so £8 VAT. That's GOV.UK's method for a 20% VAT-inclusive price (https://www.gov.uk/vat-record-keeping/vat-invoices, checked 16 Oct 2026, 05:34 BST). Question for the accountant: "How should I split the van between business and personal use?"
Your first 10 minutes
Connect your bank
In your accounting software, find the bank connection option and link your business account.
You should see recent transactions listed.
Capture receipts
Photograph or forward receipts using the app's receipt capture, or Dext.
Ask about the odd ones
Paste unclear transactions into a free AI chat with the prompt above.
Check every number
Make sure amounts match the receipt and the bank line, and that any VAT split is right (for standard-rated, 20%, items: net × 1.2 = total). Never accept a category you don't understand.
Accept the matches
Approve the suggested bank matches you've checked.
You should see those lines marked as reconciled (matched to your bank).
Book 15 minutes a week
Put a weekly reminder in your calendar so it never piles up.
What you'll get / limits
Tidy, reconciled books (matched to your bank) and a list of questions for your accountant. AI can guess the wrong category, and it isn't tax advice.
Cost
| Tool | Price (directory, checked 16 Oct 2026) |
|---|---|
| Xero | Grow £39/month; Comprehensive £55/month; Ultimate £70/month (ex VAT); introductory discounts available. https://www.xero.com/uk/pricing-plans/ |
| ChatGPT (for the prompt) | Free plan; Go £6.99/month; Plus £19.99/month (UK in-app price; web price may differ). https://apps.apple.com/gb/app/chatgpt/id6448311069 |
Compare
| Tool | Price (checked 16 Oct 2026) |
|---|---|
| QuickBooks Online | Sole Trader Plus £10/month; Simple Start £16; Essentials £38; Plus £56; Advanced £123 (introductory 90% off for 6 months often offered). https://quickbooks.intuit.com/uk/pricing/ |
| FreeAgent | Limited companies £33/month (ex VAT); free with some UK business bank accounts (e.g. NatWest, RBS, Mettle). https://www.freeagent.com/pricing/ |
| Dext (receipt capture) | Business £14/month or £132.99/year; Business Plus £27/month or £264.99/year; Premium £54/month (UK in-app price; web may differ). https://apps.apple.com/gb/app/id418327708 |
What to do next
- Next: write a quote with AI → /use-cases/quotes-invoices
- Get the free starter kit → /starter-kit
Frequently asked questions
Do I need Making Tax Digital for Income Tax?
If you're a sole trader or landlord, and your qualifying income was over £50,000 in 2024 to 2025, you should have started from 6 April 2026. Over £30,000 in 2025 to 2026 means you start from 6 April 2027; over £20,000 in 2026 to 2027 means 6 April 2028 (https://www.gov.uk/guidance/check-when-to-sign-up-for-making-tax-digital-for-income-tax, checked 16 Oct 2026, 05:34 BST).
How long must I keep records?
Sole traders: at least 5 years after the 31 January submission deadline of the relevant tax year (https://www.gov.uk/self-employed-records/how-long-to-keep-your-records, checked 16 Oct 2026, 05:34 BST). Limited companies: 6 years from the end of the last financial year they relate to (https://www.gov.uk/running-a-limited-company/company-and-accounting-records, checked 16 Oct 2026, 05:34 BST).
Does my bank give me FreeAgent free?
Some UK business bank accounts include it, for example NatWest, RBS and Mettle. Check with your bank.
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