Record Keeping and HMRC

Record Keeping and HMRC

A question I frequently get from clients is  – What records i need to keep for tax purposes?

What should i keep?

Examples of the types of records you need to keep to prove your income are items such as sales invoices, till rolls and paying-in slips.  For expenditure, you should retain records such as receipts, purchase invoices and cheque book stubs.  Other documents you need to keep are your bank statements, payroll reports if you employ someone and P60’s if you also have paid employment in addition to your business.

You can keep them filed electronically. I usually take picture of my receipts with my phone and upload it to drop box and job done. I also pay for anything business related from the business account so that I don’t forget to include any expenses.

How long do I need to keep my paperwork?

HMRC wants you to keep your records for 6 years in case they ever come to investigate your tax return.  In such circumstances, they would want to see the original records that went into the figures on your tax return.  If you do not keep the records, you may have to pay a penalty.

If you have any questions about your business records, record keeping and HMRC or are concerned that your records aren’t in the best of order please give me a call on 0116 3677424.

Regards

Jit