Book keeping

pjs_3

Hi I have started my own little craft business. (cards & rubber stamps) I have registered as self employed but am having problems with the book keeping. I have set up an excel spreadsheet, one page for things I have brought and another page for things I have sold. I understand I have to keep receipts for everything but do I really have to write down each and everything I buy and each and every thing I sell? It is really more of a hobby than a business but as I will be selling at fetes etc I had to register it as a business. I also am employed part time and probably wont earn enough to pay but I guess my tax return is gonna be a nightmare to fill in.

Pink.

pjs wrote:

Hi I have started my own little craft business. (cards & rubber stamps) (love carolyns website by the way) I have registered as self employed but am having problems with the book keeping. I have set up an excel spreadsheet, one page for things I have brought and another page for things I have sold. I understand I have to keep receipts for everything but do I really have to write down each and everything I buy and each and every thing I sell? It is really more of a hobby than a business but as I will be selling at fetes etc I had to register it as a business. I also am employed part time and probably wont earn enough to pay but I guess my tax return is gonna be a nightmare to fill in.

Hi pjs,

I think you would get more help with this on the Small Biz & Charity Organisers MoneySaving board.

Let me know if you would like me to split your post from this thread, and move it over to that board as a thread in it's own right.

Pink

pjs_3

yes please

joggyb

HMRC requires you, by law, to keep detailed records of all your outgoings and earnings if you are registered as self-employed - and they can ask to see your records at any time.... :eek:

As much as anything else, it's just good practice. But if you're not making huge sums, then it will be even more worth it, your legitimate business expenditure is tax-deductible.

Just get 12 envelopes, and write each month of the year on each one. Then put all your receipts for expenses for any given month in the appropriate envelope. When it's time to do your tax return, they'll all be ready and waiting for you in a nice, orderly fashion.

Hope this helps!

pjs_3

thanks joggyb, so I keep all the receipts in the envelopes for each month AND also put on the spreadsheet everything I have brought and sold? Eg

Feb 2007 sold - 1 birthday card @ 1.50
1 Valentines card@ 1.50

joggyb

That's prob the most sensible thing to do. It might seem tedious, but that way you can rest easy if HMRC ever do a check on you! You'll also be able to double-check your spreadsheet if you've kept all your receipts.

pjs_3

Thanks, thats what I will do then. I have just transfered all my sales onto excel and have realised that if I write what type of card it was -grandson birthday it will also help me see what sells best and what people want. It seems people will buy special handmade/personalised cards for immediate family and special friends big birthdays eg 60th. Especially at Christmas, people seems to buy a cheap box of normal cards for everyday people and handmade/personalised cards for immediate family. Thought that was the case anyway but I have proved it to myself with my spreadsheet. Thanks again glad Im doing the right thing.:T

h0ney

Hi there, i sell cards etc as well and i use 'my business' software, you can download it free via Royal bank of Scotland or Natwest, or get a version directly from https://www.mybiz.co.uk

It is really simple to use and does all your accounts for you.

pjs_3

thats great. Had a quick look which bit do i need to download?

devmcc

Hi there
Just a nod of support - I started trading as a small business just over a year ago... and am loving it!
The best bit of advice I received was to sign up to one of the free tax courses run by the HMRC. It was invaluable - it took one day out of my life and has saved me many sleepless nights... I think it was called Tax For The Newly Self Employed.
They point you in all the right directions and tell you what you need and more importantly what you dont... they cover everything...
Good luck with the business....

kay41_2

joggyb wrote:

That's prob the most sensible thing to do. It might seem tedious, but that way you can rest easy if HMRC ever do a check on you! You'll also be able to double-check your spreadsheet if you've kept all your receipts.

We run a small business and the Tax Office asked for an explanation of my husband's expenses for a whole year! This was on the back of his P11D submission and I think it was because his expenses are very high. I rang the tax office and asked them if they really wanted that much information and offered to do a breakdown of one month for them as an example. This they accepted but I still had to go through and photocopy each receipt and detail each transaction - fortunately this showed them why the expenses were so high and they didn't trouble us further! It was really tedious, but would have been 10 times worse if my records weren't pretty good.

Maybe the thing to do would be to do a little bit every day, otherwise it becomes a huge job. You need to have records of sales and purchases anyway for your accounts, and if you become VAT registered this is how you work out the VAT e.g. sales balancing out purchases. We have a spreadsheet for expenses and credit card expenses which I use to analyse the transactions and then I put a journal on Sage for the VAT return. It is dull, but an essential thing to do. I hate going through all the receipts and working out the VAT etc, but it's very important! I also have to charge back some of the expenses to our clients too, so I need to have good records.

My advice is to set up really good belt and braces record keeping systems (I'm sure you can get a book on simple bookkeeping) and don't let the work pile up.

I'm curious because I make cards for friends and family and as a hobby at the moment - how do you sell them? I would really like to sell mine at some point in the future, but don't really know how to go about it. Do you do commissions?