Each and every person filing for a self-assessment must have accurate and up-to-date business records from the last tax year. If left too late, record keeping can spiral out of control. To help you avoid added hassle and confusion, SimpleTax is here to tell you what records you need to keep, how to keep them and how long for. If your records aren’t up to scratch, HMRC could issue you with a hefty-looking fine.
What records should I keep?
Keeping your business and personal finances separate is very important. You will need both to complete your tax return. Here is the business and personal breakdown.
You must keep business records for:
- Receipts for payments
- Money you have invested into your business
- Payment to employees
- Travel costs
- Interest from banks/building societies
- Business assets purchased
You must keep personal records of:
- Money taken from the business
- Income from pensions
- Overseas income
- Partnership profits
- Any other personal income
Keeping your business separate from your personal is very important if you need to file a self-assessment. In addition keeping good records will make it easier to keep track of your business expenses too.
How do I keep my records?
Whether you choose to record them digitally or on paper, things can get a little messy, so remember to stay on top of it. It is advisable to keep your records both digitally and on paper, in case one of the other is lost. Storing your records online may be preferable to paper copy, as you can update your records as and when you please. Additionally, digital storage makes it much easier to keep track of your income and expenses, whether business or personal, thus making it easier to make the correct decisions.
In the next couple of days, we will be posting an article about ‘how to store records online,’ so if you want some time and money-saving ideas for storing records online, stay posted!
How long do I keep my records?
HMRC recommends that you keep records for an average of 5 years. This applies whether you send a paper copy or online. However, if you are a late-filer, then you may need to keep the records for longer.
So, if you’re looking for a way to make this year’s tax preparation stress-free, quick and easy-to-understand, look no further; SimpleTax ticks all the boxes.
Fancy using SimpleTax? Here’s what you need to do:
- If you haven’t done so already,
- Provide us with up-to-date, accurate records of your income and expenses for the year.
- We’ll create your tax return for you and submit it directly to HMRC online, saving you time and hassle.
We’ll also provide you a PDF version of your completed HMRC tax filing so you can keep it for your records. That’s it, tax-filing done.
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