Let’s have a little chat about record keeping in the UK! As a self employed person, you must keep records to back up the information you put on your self employed tax returns. You can keep paper records, electronic records (e.g. in a spreadsheet) or you can use software. So what sort of information do you need to keep track of?
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Self Assessment record keeping
On your self assessment tax return you generally only need to provide two figures. Your turnover and your business expenses. The system will then automatically calculate your profit and tax liability. However if you get audited you MUST have a good record of every transaction relating to your business. That means a detailed log of all income and receipts to back up all business expenses.
- Normally when logging business income I would keep track of the following information:
- Customer name
- Customer address
- Customer contact details (e-mail & phone)
- Date invoiced
- Date paid
- Payment amount
- Payment method
- Brief description of work
Obviously there’s additional information you might want to log about your customers. For instance, you might want to keep a record of jobs you’ve done for them along with photographs. Some businesses log dates of birth so you can send them a birthday card. Garages might log MOT / service renewal dates. Make sure whatever information you’re logging is within GDPR guidelines.
Again, HMRC don’t issue any specific requirements for an expenses log, but I keep track of the following and it works pretty well:
- Receipt Id (cross reference to physical receipt)
- Purchase date
- Payment amount
- Supplier name
- Brief description
I would suggest you keep a log of all business related travel, especially if you’re using the simplified expenses method for claiming mileage. I log the following:
- Start location
- End location
- Purpose of trip
- Miles travelled
- Amount claimed (generally 45p x total miles)
Using home as an office
If you use your home as an office you might want to consider keeping a record of the following:
- Gas / electric bills
- Water bills
- Council tax
- Home insurance
- Telephone bills
- Mobile phone bills
- Mortgage interest
You then need to decide on a fair proportion to claim along with appropriate justification in case HMRC ask about this.
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Originally published: 1st January 2019
Last updated: 1st January 2019
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