Clonal tree inference brings crucial insights to the analysis of tumor heterogeneity and cancer evolution. Recent progress in single cell sequencing has prompted a demand for more advanced probabilistic models of copy number evolution, coupled with inference methods which can account for the noisy nature of the data along with dependencies between adjacent sites in copy number profiles. We present VICTree, a variational inference based algorithm for joint Bayesian inference of clonal trees, together with a novel Tree-structured Mixture Hidden Markov Model (TSMHMM) which combines HMMs related through a tree with a mixture model. For the tree inference, we introduce a new algorithm, LARS, for sampling directed labeled multifurcating trees. To evaluate our proposed method, we conduct experiments on simulated data and on samples of multiple myeloma and breast cancer. We demonstrate VICTree’s capacity for reliable clustering, clonal tree reconstruction, copy number evolution and the utility of the ELBO for model selection. Lastly, VICTree’s results are compared in terms of quality and speed of inference to other state-of-the-art methods. The code for VICTree is available on GitHub: github.com/Lagergren-Lab/victree and the full paper on bioRxiv.