Record-keeping (aka Bookkeeping)

To enable you, or your accountant, to calculate your Tax and National Insurance, you will need to keep records of your business transactions. The intricacy of these records will depend on the complexity and size of your business. For a small, straight forward business, records can be equally straight forward. Records can be kept manually (hand-written books) or computerised (spreadsheets or bookkeeping software).

Records can be kept in either a paper or digital format. There are no rules or regulations for record-keeping, however, HM Revenue and Customs (HMRC) can charge financial penalties if they feel your records are not accurate, complete and legible. It is advisable to keep reliable and regular back-up copies of digital records.

You will not be required to provide your records to HMRC each year, but they may ask to see them at any time, if they wish to check your records and/or your tax calculations.

Keep minimum records of:
All business sales and income (sales invoices/till receipts)
All business expenses (purchase invoices/receipts)
Bank statements, cheque stubs, paying-in books
VAT records (if VAT registered)
PAYE records (if employing staff)
Personal income (employment income, bank interest received, dividend income, rental income, etc)

It is not a requirement, but is advisable, to use a separate bank account for your business, to keep your business transactions separate from your personal ones (mortgage, bills, DD's, shopping, etc). Not only will this make your record-keeping simpler but it will also make it easier to collate the correct information into your tax return, without needing to extract non-business transactions.

You must keep your self-employed records for a minimum of 6 years, plus the current year.

We would be happy to provide you with advice and guidance on how best to record your transactions, or we would be equally happy to carry out the bookkeeping work for you. Please contact us for a quotation.