A key part of running a business is effective record keeping. Why? Because it can help you run your business much more efficiently as well as saving you time and money if you are on track with all your records. If you fail to follow legal obligations for tax purposes, you may be fined up to £3,000 for inaccurate records.
You will need to keep records if you have to send a self-assessment tax return to HMRC (HM Revenue and Customs). This tax return needs to be filled out correctly; HMRC may check your tax return and may ask for other documents.
A crucial aspect of running your business efficiently is keeping all the information that supports your figures on the tax return, it is mandatory to keep them for 6 years. This could be information the HMRC requests. The records should include the takings and expenses and any business income or outgoings if you are self-employed. You should always keep copies of invoices, receipts and bank statements.
By doing more than the minimum required by law, will help to make sure your business is run more effectively as you will be on top of everything and have a better chance of making sure that all your records are accurate. It is important to keep a cash book that shows any money going in or going out. This helps keep an eye on the cash flow.
Having records of sales and purchase ledgers can give you access to information that shows how much customers owe you and how much you owe any suppliers for your business. There are lots of online tools you can use to record records such as Sage or Xero so you don’t have to keep records on paper.
A great way of looking after your records is by having a computerised record system. Through this, you can use spreadsheets, share data and it can do the calculations for you, which will be much more accurate and saves time. You can also create cash flow forecasts and keep up to date with your Profit and Loss at a touch of a button.
If record-keeping is something you need more support on, please call us on 01623 490120 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. We aim to work with our clients and provide up to date advice in order to help you build a successful business.
Haidee is our Personal Tax Director and is a fully qualified tax adviser, having achieved the ATT qualification in 2006. Tax efficiency being her main concern. Specialising in taxation, Haidee provides clients with advice on personal tax, PAYE services, VAT and social security. She also provides guidance to new start-up businesses.
Call us today on01623 490120
or email info@watsonk.co.uk
When you first start a business, your focus is usually on attracting customers, generating sales and building a successful company. Few business owners spend much time thinking about how or when they will eventually leave the business.
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