Just set up as a sole trader and worried about keeping records for tax? Read our advice on whether to employ a bookkeeper.
If you’ve just started in business you will need to register for tax and keep records of all sales and business receipts. You can offset pre-start expenses against tax but you may find that not all expenses you incur are tax-deductible.
On a tax return, the self employed must also report taxable income received from non-business sources, so if you have received taxable income such as Jobseekers Allowance or employment income, keep records of this too. Remember that financial records to support your tax return should be kept for up to six years.
If you’re very busy or struggle with paperwork then you may be better off getting a bookkeeper or accountant to help you. However, it’s perfectly legal for you to keep records yourself and do your own tax returns.
If your affairs are simple you may find that you can learn to manage the record keeping yourself, which would potentially save you some money. HMRC has free webinars and an e-learning course online that would teach you the basics. Alternatively BRAVE runs a bookkeeping course for sole traders.
Our next Introduction to Bookkeeping workshop on October 4th is for anyone just starting up in business with no knowledge of bookkeeping, or those already trading who want to ensure their systems are correct. It will enable you to make sense of bookkeeping so that you will have the information needed for your tax return.
Please see below for more details and to book your place.