Tax Return advice please....

Clarel26

Hi everyone,

Just looking for some advice as im quite confused.

I have started my own small business and have been advised that i do not need to keep my receipts so long as i keep a spreadsheet listing cost amount, sale amount and resulting profit and any deductions for fuel and equipment etc.

Can anybody shed any light on this as reading some of the threads on here is making me now think otherwise?

Thanks

soolin

Who advised you that you don't need to keep receipts?

When I first registered with HMRC they gave me some paperwork about the basics and they said to keep everything in case HMRC ever needed to do a routine audit on your figures.

steve1980

Agree with the above. Of course you need to keep receipts. If that was the case then I could make up my accounts to show a loss each year.

jexygirl

Not only should you keep them, but you should keep them for something like 6 years I think is recommended after the financial year they pertain to, just in case of future investigations.
Jex

soolin

jexygirl wrote: »

Not only should you keep them, but you should keep them for something like 6 years I think is recommended after the financial year they pertain to, just in case of future investigations.
Jex

HMRC told me 6 years as well as I understand that is as far back as they will go for a basic investigation.

I don't have receipts for a lot of my stuff as i buy and sell at car boots or in charity shops or cash in hand to contacts and other dealers, but HMRC told me that made it even more important to keep the receipts I do have to show a level of business that can support the in and outs for which I don't have receipts. Everythign goes in books and I just indicate by each bit whether it is supported by a receipt or not.

steve1980

If paper receipts are difficult to keep hold of then scan them in to your computer and put them in a folder for the month you bought the item.

Clarel26

Thank you for all of your replies.

I will certainly ensure that I do keep my receipts then based on your advice, the HMRC never told me anything about anything....just took all my details

Soolin, in answer to your question, it was my uncle that advised me that receipts arent required as he has been self employed for several years now and simply provides a speadsheet to his accountant with cost amount, sale amount and resulting profit amount. His tax return is then completed using this.
I wont have receipts for everything, which was a concern, as I too will make purchases at car boot sales etc. Thank you for your comments regarding this as i was worried that if i needed receipts i wouldnt be able to claim back for the items i will not have receipts for.

Thanks again everyone

WeBeBroke

I think the confusion is that your accountant may not need to see the acutal receipts, but the HMRC most certainly will if they do an audit. Even if you buy stuff at boot sales, I'd recommend getting some kind of written receipt from the seller. Then at least you'd have something to show them.

PlutoinCapricorn

I too think I can see where the confusion has arisen: there is no need to send receipts etc. to HMRC when you submit your tax return, all the more as filing online is the best option, but you certainly DO need to keep them in case HMRC want to see some evidence. This applies to income too. Anyone who does not keep proper paper records is living dangerously! Murphy's Law ensures that people who keep the evidence will probably never be asked to show it but those who don't, will!

I keep everything for 6 tax years, and scan it before shredding and recycling. You get the best of both worlds that way.

It seems that you are buying and selling on a regular basis: that makes it even more important to keep receipts for the costs. As a consultant, I might get away with not being able to produce the bill for a packet of envelopes I need to send my invoices in, but someone who has regular expenses that are the essence of the business must be able to support their claims with hard evidence.