The bookkeeping records you need to keep.
When you start up a business and there are a thousand things to do, the last thing you’ll be worrying about is keeping your paperwork in order. Take this advice from the people who sort out the mess many new business owners find themselves in and make your paperwork a priority. It’ll save you time when it comes to completing your self-assessment tax return or your corporation tax return. And, if you have an accountant or bookkeeper, they’ll need this information too.
The HMRC Business records you may need. This is a legal requirement and is important for your business. It makes it easier to fill in your tax return and a good record system helps you keep track of your expenses. You may have to pay a penalty if you don’t keep records or if you don’t keep your records for long enough.
Records you must keep
Your business records must include:
- All of your sales and takings
- All your purchases and expenses
Records you may need
Every business is different and there are many types of detailed records that you may need to keep. Here are some examples:
- Invoices and receipts
- Electronic sales records or till rolls
- Mileage records
- Bank statements
- P60s (if you are also employed)
- Payroll records (if you have employees)
- Rent books
- Hire purchase records
- An inventory of stock on hand
- A record of money taken out of the business for personal use
All of this information will be useful for filling in your tax return and answering any questions HMRC may ask you.
How to keep your records
Keep your records either on paper or on a computer. For electronic records you must:
- Capture all the information (front and back)
- Save information in a readable format
- Keep a back-up
More than one business?
If you’ve got more than one business you’ll need to keep separate records for each business and make sure you keep detailed records. It will make it easier to answer any questions HMRC asks you about your tax return.
Additional information and paperwork you may need
Rental income: A summary of your rental income and expenses, bills for expenses, bank statements, letting agreements. Take particular care to separate repairs, replacements and improvement expenses.
Savings income: A summary of interest received from your statements or passbook – be careful to note if the interest has been paid with a deduction of tax at source. For dividend income you will need the dividend statements.
Social Security Benefits: A letter from the DWP showing the amount of your state pension or other taxable benefits. For Jobseeker’s Allowance, there should be a form P60.
Capital gains: Contract notes for the sale and purchase of assets such as shares or antiques. Details of the period of occupation and letting, for houses that have at some stage been your main private residence, but have also been rented out to tenants.
Other information: These lists are not exhaustive. If your return is selected for an enquiry, you may be asked to explain to HMRC where any large amount of money has come from, or how you have provided money to fund your overall lifestyle.
Need help with your business paperwork? We’re here to help.
Tel No: 01482 210876