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Do I have to keep my receipts???

January 22, 2020

 

If you are a Sole Trader or have a Limited Company then you need to keep a record of income and expenditure in order to complete your accounts and to comply with HMRC requirements.

 

As a business owner do I need keep receipts?

If you are a Sole Trader or have a Limited Company then you need to keep a record of income and expenditure in order to complete your accounts and to comply with HMRC requirements.

 

Accounting Records

Records should be kept for the following:

  • Services and goods bought and sold along with a record of who you bought and sold them to (with the exception of retail sales) 

  • All money received by the company (e.g. orders, delivery notes and petty cash books)

  • All money spent by the company (e.g. contracts, till rolls, sales books and invoices)

  • Assets owned by the company

  • Debts the company owes or is owed

  • Stock inventory owned at the year-end & stocktakings used to work this out

  • Bank statements

  • Records of personal income

If you are VAT registered then you must keep VAT records to account for all transactions within your VAT returns.

If you operate a PAYE scheme then you must also keep PAYE records to show that employees have been paid correctly with the correct tax and NIC deductions. 

 

How Do I Have To Keep These Records?

The records can be kept digitally, as part of a software program, or on paper. We recommend using Xero and Receipt Bank to capture your invoices and receipts to avoid having to keep paper copies of everything.

 

How Long Do I Have To Keep My Records?

Sole Traders must keep their records for 5 years after the deadline to file your tax return. E.g. your 2011 tax return was due by 31 January 2012 so the records should be kept until at least 31 January 2015.

 

Limited Companies must keep their records for 6 years from the end of their Financial Year.

 

You should also keep records longer if they relate to items like machinery or equipment that you expect to last longer than 6 years or if a transaction covers more than one accounting period.

 

 

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