The UK has strident requirements for record keeping, especially for those that are self-employed. Figuring out what to keep and how to report it can be particularly difficult, and failing to do some can come with unexpected costs at best, and high penalties at worst. The first thing that’s important to know is what kind of records you should keep, and most importantly, knowing how to keep your business and personal records completely separate.
Below is compiled the list of information you need to ensure that everything needed for a clean report this year is ready.
What Records do I need?
- Money invested in the business
- Costs of Travel, including origin, destination, and purpose.
- Interest from bank accounts
- all expenses incurred wholly and exclusively for the purposes of business
- records about any other personal income, outside of the business.
- all receipts for goods and stock
- bank statements, chequebook stubs
- sales invoices, till rolls and bank slips
- VAT records, if you’re registered for VAT
- PAYE records, if you employ people
As well as the standard records, you’ll also need to keep further records so that your tax return includes:
- what you’re owed but haven’t received yet
- what you’ve committed to spend but haven’t paid out yet, eg you’ve received an invoice but haven’t paid it yet
- the value of stock and work in progress at the end of your accounting period
- your year-end bank balances
- how much you’ve invested in the business in the year
- how much money you’ve taken out for your own use
These days there are also a lot of options in how you keep your records. Before it was all receipts, invoices, and records printed out on paper, resulting in long and tedious hours of manually going through each and every entry and punching them into a calculator or spreadsheet. In our modern age new options have presented themselves that ensure that your records will be clean, straight-forward, and easy to process. Digital record keeping is on the rise, and more businesses are issuing invoices and receipts electronically to keep down printing and delivery costs.
Benefits of Digital Records:
- Save on Storage Space – Given that these records are all stored in 1’s and 0’s, there’s no need for an overflowing filing cabinet of ever entangled receipts.
- Instantly Order – Organizing your records to make sure you have all the right info in the right place can be tedious and infuriating… Or quick as pie with digital storage software.
- Get them Anywhere – With a multitude of cloud storage options, you can access these records anywhere, so they’re never forgotten.
- Send them Anywhere – The same is true in reverse, rather than bundling up huge, heavy boxes of paper to transport to your accountant, you can send them all with one share request.
- Safe Storage – Especially with cloud storage, you’ll never have to worry about losing a record, or having it become destroyed or illegible once you have it in a cloud.
Keeping orderly and complete records is vital for making sure you’re not paying too little and incurring penalties, or paying too much and having to fight to get any overpayments returned. So consider switching to digital records for your business records, and using the free time gained to further your business objectives.
Cooper Bradshaw provide free Xero and Receipt bank software to its clients. We can also provide low-cost EPOS software (Vend) to retailers. These items of software instantly streamline your record keeping processes and improve your compliance and not only that, important management reports are securely accessible from any device, anywhere in the world. To find out more simply check out our Partners page.