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|Small Business – Keeping Proper Records|
Brian Redford, Acting Director, Business Customer Unit, highlights the benefits of keeping good, up-to-date records, and a new online tool to help small businesses.
Calling All Small Businesses: Are You Keeping the Right Records? Do You Know Which Records the Law Says You Need to Keep?
Whether you work for yourself or you run a small business employing others, good record-keeping has a number of benefits. For starters, if your records are up-to-date, it makes filling in your tax return easier and could help you avoid paying too much tax. Keeping track of your income and expenses will also help you budget for any tax you owe. And it can also help reduce your accountant's fees, if you use one, as well-organised information saves them time too.
Up-to-date records also give you the information you need to manage your business and help it grow. They will make it easier to get a loan, if you need one, and may support your claim to some tax reliefs or capital allowances.
Invoices, Receipts and Deductions
You should keep invoices and receipts to show what you have bought or sold relating to your business. If you are employing others, you must keep records of their wages and the tax and National Insurance you have deducted and paid to HM Revenue & Customs (HMRC). You need to show clearly what you have spent personally and what you have spent on your business.
If you use cash, you should retain till receipts and a record book to keep track of it all. If you are using part of your home for business then you should keep copies of utility bills, so that you can work out the amount spent in relation to your business.
Update Information Regularly
You should update the information regularly – if you don’t you may face a penalty for failing to keep adequate records.
What Records do I Need to Keep?
Whether you are just starting out in business or you are already up and running, Business Link’s Online Record Checker will tell you which records you need to keep and give you feedback on any improvements you need to make. Go to Find Out What Records You Should be Keeping.
We’ve also produced a basic factsheet on record-keeping that covers self employment, contracting in the Construction Industry Scheme, partnerships, VAT, employers and limited companies. See Keeping Records for Business - What You Need to Know
And for details of how to set up a basic record-keeping system go to Set Up a Basic Record-Keeping System.
About The Author
HM Revenue & Customs is the UK's primary taxing authority, responsible for the administration (and collection) of direct and indirect taxes and duties, and certain benefits.
Article Added Saturday, 19 March 2011 | 1785 Hits