Running a business creates paperwork, even when most of it is digital.
Good record keeping makes bookkeeping easier, helps you claim the right expenses and means the information you need is ready when it comes to dealing with HMRC.
What records should a sole trader keep?
You need records showing the money coming into and going out of your business. This normally includes:
- Sales invoices and other business income
- Receipts and invoices for business expenses
- Bank statements and transaction records
- Business mileage
- Money invested in or taken from the business
- Equipment or assets purchased for the business
The aim is to have an accurate record of your business finances.
Do I need to keep paper receipts?
Not necessarily.
Receipts and invoices can be stored digitally, and accounting software can make keeping everything organised much easier.
The important thing is that your records are clear, complete and available when you need them.
What if I lose a receipt?
A missing receipt does not automatically mean an expense cannot be claimed, but you need evidence that it was genuinely for your business.
A bank transaction and information about what you purchased may help.
Keeping your bookkeeping up to date makes missing information much easier to spot and resolve.
How long do I need to keep my records?
For Self Assessment, you’ll normally need to keep your business records for at least five years after the 31 January submission deadline for the relevant tax year.
Some circumstances require records to be kept for longer, so don’t automatically dispose of them once your Tax Return has been submitted.
What about Making Tax Digital?
If Making Tax Digital for Income Tax applies to you, you’ll need to keep digital records and use compatible software.
Getting into good digital record-keeping habits now can make the move to MTD much easier.
Make record keeping easier
Keeping your records organised throughout the year means less catching up and gives you a clearer picture of your business.
With Brease, your bookkeeping is kept up to date throughout the year, your accounting software is included, and you have support from real people when you need it.
Ready to make your bookkeeping easier?
Get your instant Brease quote and see your fixed monthly fee.
Looking for more simple business advice?
This guide is part of the Brease Guides collection, created to help sole traders understand bookkeeping, tax and Making Tax Digital without the jargon.
