Keeping all paperwork for tax return
purpleroad
Posts: 57 Forumite
Is it best to keep all receipts (for tools etc), invoices and everything else in a big box for each tax year?
Use one bank account for all transactions including having tax credits paid into?
Use one bank account for all transactions including having tax credits paid into?
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Comments
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Yes, keep everything and also keep your private bank account statements (and credit card statements) if they're used for business transactions.0
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Best to have tax credit payments paid into same business account? As a handyman/window cleaner and there is so much cash involved not sure the best way to record this and what needs to be recorded to keep the taxman happy. On my phone would be easiest and convenient.0
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Lots of phone apps for cash based tradesmen. Google for Sage One and Quickbooks to start with and take the trials.0
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Basically, keep everything. Everything. Better still, keep each month in an envelope and 12 envelopes in your box. Your annual return is accepted on trust, but if you get a random audit, they'll pick a couple of random periods and if they're all enveloped up and in good order, that's no bad thing.0
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Basically, keep everything. Everything. Better still, keep each month in an envelope and 12 envelopes in your box. Your annual return is accepted on trust, but if you get a random audit, they'll pick a couple of random periods and if they're all enveloped up and in good order, that's no bad thing.
What is kept in each envelope?0 -
purpleroad wrote: »What is kept in each envelope?
Just having one a month, makes everything easy to find
Feel free to have any filing system you like, this is just a simple one with a useful enough resolution. 0 -
Will look into all this. Basically as window cleaner I would record down the hours customers and money taken in each day somewhere maybe an app. In envelope keep all invoices ( asking to be paid paper) and receipts- (tools I bought) which can be written off against tax?0
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Expenses reduce the profit on which tax is paid - not directly taken off the tax bill.purpleroad wrote: »Will look into all this. Basically as window cleaner I would record down the hours customers and money taken in each day somewhere maybe an app. In envelope keep all invoices ( asking to be paid paper) and receipts- (tools I bought) which can be written off against tax?
Personally, I would use a notebook to record the work and takings each day. You can transfer the figures into a spreadsheet later.
I print out monthly spreadsheets so I have paper records. Relying on computers entirely even with backups seems an unnecessary risk.0 -
As finding software complicated to use. My gardener friend just has a book he writes down (in columns)-
date invoice reference number who from amount with a tick if paid.
I guess do that to keep them happy.
Would need to go back and look months work in diary as hjasnt been recorded and record it and write out invoice etc I guess. That will be tricky working out what was done etc0 -
a written record of who paid you (your income) and who you paid (your expenses) should help you when it comes to doing your tax return. It would be better to have at least a column only for income figures and a separate column only for expenditure figures to make totalling up easierpurpleroad wrote: »As finding software complicated to use. My gardener friend just has a book he writes down (in columns)-
date invoice reference number who from amount with a tick if paid.
I guess do that to keep them happy.
Would need to go back and look months work in diary as hjasnt been recorded and record it and write out invoice etc I guess. That will be tricky working out what was done etc
for tax records purposes a handwritten record is not enough though, you do need to keep the receipts as well as evidence of what you actually paid for. Your handwritten book would thus be an ideal way to cross reference the book entry against the physical receipt by simply numbering each line and writing that number of the receipt. The receipts can then be shoved in a shoe box and ignored (unless you get asked from them in a tax inspection at which pint your cross ref number will enable you to easily find the right one). Alternatively, as mentioned by Pennywise above, you can scan the paperwork and keep the image, that way you don't need to store the paper original and it can be binned
if by "invoice" you mean the invoices you produce for your customers recording your own income then yes, they do have to be "kept". If you are not using software (and so cannot recreate the invoice to be printed by pressing a button) you will have to keep a hardcopy of each invoice you sent out, there is no alternative to that as it is a vital part of the record of how much you earned.0
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