Friday 19 August 2011

Bookkeeping - What are my obligations to record-keeping?


Q: I have just started my own business having been made redundant from my last job. I have registered with HMRC as self-employed, but could you tell me what my obligations are with regards to record-keeping for HMRC?

A: Under current legislation, business owners must retain their records for 6 years. Payroll records, CIS records and personal tax return information may be retained for less.

HMRC provide no rules regarding the format of the records, but as a minimum they should include all sales and purchase invoices.

Ultimately, the most important factor is that you keep accurate, timely records. So these could be anything from manual cashbooks, to computerised spreadsheets, to a sophisticated computerised bookkeeping package.

Penalties will apply if HMRC ever enquired into your affairs and found no evidence to back up the figures in your income tax or VAT returns. HMRC are also clamping down on poor records, and can impose fines in severe cases where the records are felt to be inadequate and inaccurate.

For advice on finding the right bookkeeping solution for you and more detail on your obligations, please feel free to contact me as follows.

Linda C F Ngo FCCA
Email:  lindango@taxassist.co.uk
Website: www.taxassist.co.uk/lindango/



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