Keeping up-to-date and accurate records from the start is important for your business. It makes it easier to complete your tax return. A good record system helps you keep track of your expenses. If you do not keep adequate records or complete your tax return correctly or on time you may have to pay a penalty.
All businesses are different and there are many specific types of detailed records that you may need to keep. Some examples of records you may need to keep include:
- cash book
- petty cash book
- sales and purchase ledger
- wages book
- invoices and receipts issued and received
- electronic records of sales or till rolls
- details of items not rung through the till
- details of incidental or miscellaneous income – for example rent for accommodation owned by the business
- hire purchase and leasing details
- an inventory of stock on hand at the end of your accounting year
- bank and building society statements, pass books, cheque stubs and paying-in slips which include details of business transactions
- details of any money taken out of the business for your own or your family’s personal use
- details of any private money brought into or taken from the business
All this information will be useful for completing your Self Assessment tax return and answering any questions that HMRC may have about it.
You’ll need to keep business records for up to six years – or longer if HMRC starts a check.