Book keeping

Book keepers are considerably cheaper than accountant but then it's a very different service.

Why do you want a book keeper and not an accountant?
Depending on how complex your business is, it shouldn't be too difficult to kepe track of your books yourself (e.g. Excel spreadsheet) but you see, I think it's worth spending on an accountant for the (tax reduction) advice you get.

If you are a small business and not registered for VAT you don't need either.

An excel spreadsheet should record all our payments out of your bank account.  This should be ticked off and checked against your bank statement monthly.  A second sheet on excel should have your income.  Again ticked off against your bank statement.  Third sheet should show summary of income and expenditure and hey presto you have your bank reconciliation.

Now to produce your accounts.  On your excel spreadsheet going across the page have columns for
1. Materials
2. Electricity/Gas etc
3. Rent/Rates
4. Stationery and office exp.
5. Drawings (this is money you draw for yourself like wages).

and any other items you think are important.  

For income similar thing but just really Sales and other income.

As these columns should cross balance with your total expenditure income you will not miss anything out.  From this you can then compile a column of total expenditure for the year on each item.  Now the only adjustments you need to do is for:

Stock (if you have any.  reduce expenditure by amount of closing stock - remember in your next year to increase your expenditure by the same figure as it's your opening stock).

Private household bills.  i.e. you are allowed upto 10% of your home gas, electric if you do your accounts at home.

Assets.  If you buy a computer or any tools or equipment for use in your business over a number of years you do not include the full cost in the year you buy.  Rather these become a Capital expenditure item and you depreciate them over 3-5 years.  This means you divide the total cost by say 3 years and add this 1/3 to your expenditure.

Drawings.  As this is you paying yourself reduce your expenditure by this amount.

Now you have your profit and loss figures.

With this you can now complete your self assessment on line and the computer will calculate your tax for you.

If you have a private pension there is a separate box on the return for this.  Just follow the notes of guidance.  Same with savings etc put your share if joint account in the relevant box.

What is Business Link? I deal with all the invoices in my job at work, and keep excel records for our budgets; I work on a magazine called Computer Weekly. However, I would like to learn how to keep the books, in a format suitable for self-assessment. This is because I have a husband who is a plasterer and hands me receipts from the glove box when it will no longer close!