Basic TAX RECORD KEEPING when you’re self employed
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- Опубліковано 12 тра 2024
- When you’re self employed in the UK you’re obliged to keep business accounting records. Today we’re looking at what information I log to record income, business expenses, running a vehicle through the business and using our home as an office. As per usual, I am not an accountant. Always use a good accountant.
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Extension Cost Chapters:
0:00 - Introduction
3:10 - HMRC requirements
6:50 - How long to keep records?
7:25 - Logging business expenses
14:55 - Tracking business income
20:33 - Business mileage
26:28 - Using your home as an office
30:52 - Summary calculations
33:20 - Spreadsheet vs accounts software
34:40 - Dealing with electronic receipts
37:40 - Data backups and final tips
#Accounts #Expenses #tax
Join as a member and download the spreadsheet from this video here: smallbusinesstoolbox.uk/tax-receipts-record-keeping-uk/ 👍
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Have you a video comparing accounting software? ie xero, QuickBooks? and a video for Starling Toolkit software? Thanks!
Have just got stuck doing my self assessment tax return, and searched loads before finding this video.
Thank you SO much! This has literally answered all my questions, and I have now completely changed the format of my spreadsheet too. Perfect.
Thank you!
New subbie! You might not be an accountant -but this was perfect!!! This was definitely the one I found most helpful and easy to follow - thank you! ❤
B&Q receipts are notorious for having the date missing when they are ripped from the till printer, check before you leave the store!!
Yup - and Sainsburys can be problematic too! 😁
Thank you!!
So helpful thank u
Hello Gosforth ! Great Video !!! 😀OMG you were audited ? (Wow would love to hear that story starbucks and all that). What may make your system faster is to us a dedicated acc for your business, download and work from there eg add a column for mileage and add next to each entry eg BnQ Xmiles.. Barclays give a good bit of info
Great video Andy. Lots of really useful advice and tips. I use very similar receipts filing systems for both paper and electronic receipts, and have a similar accounting spreadsheet to yours for the accounts for a club that I am treasurer for. I have one spreadsheet per tax year, and just copy the previous years sheet and delete all the data in it to get ready for the next tax year - I would struggle with the amount of data if I had just one spreadsheet for multiple tax years. Talking to your accountant is good advice, as is recording your basis for deciding how much to charge to the business for home office us is good advice. We don’t issue many invoices (1 in the last 3 years) but we have an invoice template (a spreadsheet!) and fill this in and save the invoice to a separate folder much like you are saving pdf copies of your receipts. I use a copy of Quickbooks v3 I bought in 1992 for my property rental business. I have to use DosBox to run Windows 3.11 (aka Windows for Workgroups) to run it but is still does all the accounting I need.
Cheers Tony! Fantastic stuff - Windows 3.11, that takes me back! I'm still using Money 97. 27 years old and still does everything I need! 😂👍
When I was working as an accountant, I'd love to have such clear records. On the income sheet, I'd add column for amount outstanding and any bad debts, which makes it easier at the year end if accounts are prepared on accruals basis, plus if invoice is part paid it stands out. I think I only remember one client who could fill in a Simplex D book in correctly and the VAT version was terrible. A lot of people don't know to use filters, so lovely to see them used. Maybe should have mentioned the formula to subtotal items. Also recheck formulas from time to time as it's easy to change one and forget you've done it for just that one cell as carry on using it when it should be different.
Cheers Jules! For some reason my screen recorder software doesn't show the filter drop-down, which is a bit annoying. But yes, they're invaluable! 👍
@@SmallBusinessToolbox I could see the little arrows.
I would also recommend leaving some notes for your loved ones as to how you have been doing your accounting! If you were to die, it would be really useful for your executor to know where your accounts (and receipts) are to be found and something about how they are organised. Having the passwords for services your business uses safely stored is also a good tip. I use a password manager and have seperate folders and records for the different services I use for my personal and business activities.
A very good tip!
All of this!!!!!!
Mate, you are a leg end. I've just started a property maintenance service and needed this information SO bad. I'm a Geordie living in Manchester so it's a shame your a distance from me as I recon I owe you a few pints. Cheers for the help.
You're very welcome - best of luck!
@@SmallBusinessToolbox Wonder if you could help me with one of the things you spoke about. I have Dyselxia so finding it hard. Office expenses working from home.... My office station is in my bedroom, I need to understand how I work out the percentage rate for the hours I use the office portion of bedroom space for work. Rent (for example) I know my anual cost devided by rooms gives me X amount per room, so Do I take that amount and devide it by 52 weeks? Then devide that amount by 7 to give me per day? Then lets say I use my Office for an hour every night, devide that day amount by 24 then times it by 7? this I think is the amount I can claim for a week so again times that by 52 which gives my the amount I can claim for anually? BUT HOW DO i WORK OUT THE PERCENTAGE THIS IS? Sorry, my head does not work well with percentages. If you're too busy, totally understand, jusy thought I would ask.. Cheers
No worries! I would just divide by 365 rather than 52 then 7, bit easier. To make it even easier, it you literally use it for 1 hour every night (on average) then I would just take your total yearly bill and multiply it by 1/24. I'm going to make a video about this though. 👍
I use the previous version of this spreadsheet that has served me well for 3 years since setting up as SE, thankyou!
Alongside this, my accountant’s fees include the use of Dext for logging receipts, both electronic and paper via photos taken via the app. They introduced this as a workaround during lockdown and have kept it in place. I suppose if I ever leave my accountant then potentially I may have an issue accessing them, but not currently on the cards.
Great stuff Darren! 👍
great information, i have just been working self-employed and pay as you earn also I have a pension which is also tax have you got a video on this and what can I claim on this
Hi Andy, thanks very much for another excellent video. Do you have a copy of your spreadsheet that you would be happy to share? Many thanks
No worries - cheers! It's all on the member area here: smallbusinesstoolbox.uk/tax-receipts-record-keeping-uk/ 👍
If I have a software subscription as a business expense, do I have to include a line for every time I was billed, or can I just include the entire sum as one line for that tax year?
Personally I would add a line every time I'm billed as it makes reconciliation easier. Especially if the annual renewal breaks over your tax years.
Great video Andy, quick question about vehicle expenses. Do you still keep all the receipts for vehicle insurance, fuel, repairs etc when using the milage method as show?
Generally no, it's one or the other. You can't claim for running costs if you're claiming mileage.
@@SmallBusinessToolbox brilliant thank you 👍
Hi great video. 1 question what do you do if you buy something 2nd hand but its a tool or equitment you sell on? Thanks.
You should try to get a receipt for the purchase and the sale if possible. Worst case, a text message / e-mail trail would be better than nothing. Depends on the value and how HMRC are feeling if you get audited. I'd just record the purchase as an expense and the sale as income. 👍
@@SmallBusinessToolbox ya thats what i try to do. Or have my own duplicate book for buying thing 2nd hand so can claim for them.
hello, I have a question regarding the vat threshold. I have a seasonal business and similar businesses usually work up to when they reach the VAT threshold for the year and then stop as to not become VAT registered. If I were to do that and then did some work personally for someone else after I have finished, or even set up a completely unrelated business, would both my personal income from working for someone else, or the extra business I create have a separate incomes and would not contribute to my existing businesses vat threshold. I would be a sole trader/individual in all of these examples. Thank you!
If they're entirely separate businesses this is normally fine but have a look at this article as HMRC are quite strict on what classes as a separate business: www.accountancyoffice.co.uk/can-i-separate-my-businesses-to-avoid-registering-for-vat/
Would you also keep a record of your business assets/liabilities on another spreadsheet?
Depends what sort of liabilities. For assets I'd just keep them in the expenses sheet but perhaps categorise them differently so they can be filtered out if needs but. Also depends whether your accountant wants to claim them 100% in-year or depreciate them etc. 👍
I found out that if I carry a worker or 2 in my van as a self employed Cycle Instructor, I can claim an additional allowance of 5p per passenger . i have amended the downloaded spreadsheet from you
Great stuff!
Hi Andy, quick question, would you still recommend using one tap receipts? I noticed you didn't include that recommendation here on you're video where you are not sponsored by them. Did you try them for a while and revert back to you're paper method?
One Tap - I have no idea if they're even still going to be honest! The app was impressive but I'm too much of a control freak and still prefer spreadsheets. We tend to store all receipts electronically now though (just take a pic of them or scan them). 👍
@SmallBusinessToolbox ok, thanks for letting me know!
Is storing the receipts electronically in addition to tapeing them in to a ring binder or instead of?
I kind of feel like a ring binder in some ways is actually quicker than photographing and organising them digitally. Would be interested to know what you're current digital workflow is for this if you have gone fully digital. -cheers
That's instead of the binder. Although you're right, if you still deal with a lot of paper receipts the binder can still be the most efficient. 👍
I'm a bit confused re: business mileage. I do it more or less that way, in a spreadsheet, but I've read that this isn't sufficient - that you MUST keep a physical logbook with odometer readings for business and personal journeys. Is this not essential?
I've never seen anything saying you need a physical hand-written log book. I think it depends how HMRC are feeling at the time of audit though!
Do you have to keep record of your utility bills even if you aren’t the person that pays those bills?
Generally speaking you can't claim them as expenses if you're not paying them, so the records would be pointless. No harm though!
Hello, I'm thinking of going self employed with hobbies and part time jobs I have. I'm confused about why your spreadsheet is January to December when the tax year is April to April. Why isn't your spreadsheet April to April to match to tax year?
It's just a never endling list of transactions so the start date doesn't really matter. The tax year is indicated by the final column. 👍