keeping records for tax purposes

dllive

Hi, I want to keep records for tax reasons. Ive been reading the HMRC website about keeping records and they sent me to this page: http://!!!!!!!.com/p4geza . Is this profit and loss account sufficient enough to keep records? Ill only be sending out a few invoices this year and probably wont have much in the way of expenses, so dont want to use complicated software. Has anyone a sample excel sheet that will do for this or have any suggestions?

fengirl_2

A couple of spreadsheets will be fine - one for income and one for expenditure. Make several columns on the expenditure one so that you can keep a total of each type of expense, eg travel, purchases, postage, etc. Keep all your receipts and copy invoices.

PlutoinCapricorn

If you have only a few invoices and a small number if expenses then I agree that there is no need for a complicated accounting package.

I even do it on the one spreadsheet: one page for income, one for expenses and one for totals ready to transfer to the tax return.

The expenses have headings and columns for running costs and a column for sundries.

All items are supported with the paperwork and bank statements, which are also scanned.

Pennywise

Your spreadsheet also needs different date columns to show when each item was actually incurred and the different date the money was actually paid/received. Don't forget that you have to declare monies earned in each tax year, even if payment wasn't received until the subsequent tax year, and likewise with expenses. For self assessment, payment dates are broadly irrelevant, it is the dates on which the work was done, items were bought, services were used, etc. that matters. Also remember to account for "year end reversals", such as stocks held at the year end, prepaid expenses, such as where you maybe pay for a year's advertising in advance, and accruals where you've used a service in one year but not been invoiced for it until the later year. It all gets quite complicated so for anything but the simplest of cash based businesses, your spreadsheet will be a lot more complicated that a simple list of ins and outs!

dllive

Thanks for your comments guys. I'm going to be really cheeky now and ask if anyone has a link to a templated excel file for ingoings/outgoings (Im useless at Excel!). I did do a Google yesterday for this but to no avail. Thanks.

fengirl_2

If you are useless with Excel, you will not be able to maintain this type of cash book. Suggest you buy a ready ruled cash book and maintain manual records at least until your spreadsheet skills improve.