Best Accounting Software for Contractors UK 2026

Introduction

Contractors in the UK, particularly those in construction, have bookkeeping needs that most accounting software simply does not address. The Construction Industry Scheme (CIS) adds layers of complexity around deductions, monthly returns, and contractor verification that generic platforms were never designed for.

This guide reviews the best accounting software for UK contractors in 2026, with a focus on CIS compliance, practical usability, and MTD readiness.

What Contractors Need

CIS subcontractors need software that tracks gross payments and deductions (typically 20% for registered, 30% for unregistered subcontractors), handles the fact that materials are excluded from CIS deductions, verifies contractor details with HMRC, files monthly CIS returns, and integrates CIS deductions into Self Assessment.

Beyond CIS, contractors also need standard bookkeeping features, receipt management for materials and tools, mileage tracking for site visits, and MTD compliance.

Accounted

Accounted has a purpose-built CIS module that handles the complete CIS workflow. When you record a CIS payment through WhatsApp, Penny asks about the materials portion (since CIS deductions only apply to the labour element), calculates the correct deduction, and records everything properly.

Key CIS features include contractor HMRC verification, automatic deduction calculations on labour portion only, materials exclusion with Penny prompting you for the split, monthly CIS return preparation and filing, CIS deductions flowing through to Self Assessment, and CIS payment and deduction statements.

Beyond CIS, Accounted provides AI-powered bookkeeping through WhatsApp, mileage tracking at HMRC-approved rates (45p per mile for the first 10,000, 25p thereafter), receipt scanning via WhatsApp, and full MTD compliance.

Pricing starts at £14 per month. See the pricing page for all plans.

Xero

Xero does not have built-in CIS support for subcontractors. You can track CIS deductions manually using custom fields, but there is no automated deduction calculation, no HMRC verification, and no CIS return filing. Some Xero add-ons provide CIS functionality, but this means additional cost and complexity.

Xero's strengths lie in its general bookkeeping capabilities and extensive accountant network. If your accountant handles all your CIS returns and you just need basic bookkeeping, Xero with a CIS-specialist accountant can work.

QuickBooks

QuickBooks has some CIS functionality in its higher-tier plans, allowing you to track CIS deductions and create CIS statements. However, the CIS features are more geared toward contractors who employ subcontractors rather than subcontractors themselves.

For sole trader subcontractors, QuickBooks does not offer the complete workflow you need. You would likely still need to handle some CIS requirements separately.

FreeAgent

FreeAgent does not have dedicated CIS support. You can manually record CIS deductions as tax credits, but there is no automated workflow for CIS returns, verification, or deduction calculations.

The free access through NatWest banking makes FreeAgent attractive on cost, but for contractors who need CIS compliance, the manual workarounds add friction.

Sage

Sage's higher-tier products include CIS features, but these are typically aimed at larger construction businesses rather than sole trader subcontractors. The pricing for Sage plans with CIS support can be significantly higher than other options.

BrightPay

BrightPay is primarily payroll software but includes CIS features for contractors who engage subcontractors. It handles CIS verification, deduction calculations, and monthly returns. However, it is not a full bookkeeping solution, so you would need it alongside other accounting software.

HMRC's Own Tools

HMRC's Basic PAYE Tools can handle CIS returns for free. It is not pretty and it is not integrated with anything else, but it costs nothing. For contractors who want to minimise costs and are comfortable with HMRC's interfaces, this covers the CIS filing requirement.

You would still need separate bookkeeping software for everything else.

The CIS Workflow Challenge

The real issue for contractors is not just filing CIS returns. It is the day-to-day tracking. When you receive a payment with CIS deducted, you need to record the gross amount, the deduction, and the net payment. You need to know whether materials were involved and exclude them from the deduction calculation.

Most accounting platforms treat this as an edge case. Accounted treats it as a core workflow. When you tell Penny about a CIS payment via WhatsApp, she walks you through the details: gross amount, materials portion, deduction rate, and confirms the net payment. Everything is recorded correctly without you needing to understand the accounting entries.

Mileage for Contractors

Contractors often travel to multiple sites. Mileage tracking matters because HMRC-approved mileage allowances can significantly reduce your tax bill. Most accounting platforms offer basic mileage logging, but few make it genuinely easy.

Accounted lets you log mileage through WhatsApp. Tell Penny you drove to a site and she will ask the distance, whether it was a return trip, and record the allowance at the correct HMRC rate based on your year-to-date miles.

Our Recommendation

For contractors who need comprehensive CIS support alongside modern bookkeeping, Accounted offers the most complete solution. The CIS module is purpose-built, not bolted on, and the WhatsApp-based workflow means you can record payments and expenses on site without needing to sit down at a computer.

For contractors whose accountant handles all CIS returns, Xero or QuickBooks with a CIS-specialist accountant can work, though you are paying for two services.

For contractors who want to minimise cost, HMRC Basic PAYE Tools for CIS returns combined with a separate bookkeeping tool is functional but requires more manual effort.

Sign up for Accounted and get a bookkeeping platform that actually understands construction.