accounting records

Do I Keep Records If I am Self-Employed?

If you make income working alone through the selling of a product or a service and you are not registered as a limited company, you are classed as a sole trader. A sole trader does indeed run their own business and is classed as self-employed. Being self-employed does require certain accounting records needing to be kept to report your income, expenses and profit to HMRC on your annual tax return. If you are a partner in a business you are also considered to be self-employed and need to ensure that the partnership keeps all relevant accounting records to report your share of the income, expenses and profit generated from the return to your self-assessment tax return.

The Records Required

Being self-employed, there are a few records that you need to hand.

First of them would be your details around all sales and income. Not all income you have is trading income, such as an investment you make into the business or any loans your receive from third parties. These are not taxable income either.

Any grants which you may have received such as a SEISS or Furlough claim if you are an employer are classed as taxable income and will be required for your tax return. You must document all expenses relating to the selling of your product or service and the running of your business through them. This covers a range of areas such as any materials, advertising, insurance, phone bills and stationary, as well as other costs. This would include wages also for any staff, but not your own.

Providing copies of your VAT return and any VAT you have paid or reclaimed if you are VAT registered, which must be supported by the transactions making up the total of each box on your VAT return is also required, along with records of any wages or deductions if you are an employer.

Tax Return

In preparing your tax return, your total income for the year will have to be entered along with your total expenses. All profits made throughout the year will be taxable, and by having your accounting records organised and up to date throughout the year by bookkeeping services, you will be able to easily calculate the two figures.

HMRC may want to check all figures that are submitted in your tax return and will request proof of your income and expenses. Therefore, it is recommended that all copies of your sales invoices, till rolls, invoices and receipts on all purchases and bank statements be accessible to hand in paper or electronic formats.

For more information on self-employed bookkeeping and accounting records, contact the team at Pebbles for bookkeeping services in Manchester.

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TecCre8 Ltd

“We began to relinquish our bookkeeping tasks to Pebbles Bookkeeping in September 2020, following our meeting with Diane Huxley to discuss our requirements. We signed up with Diane immediately. We have all built a quick rapport with Diane and it’s good to know that we have her support and expertise at the other end of the phone.

Pebbles Bookkeeping is a perfect fit for our company and liaises seamlessly with our accountant. It is our pleasure to work alongside them.”

James Balderstone, Lucid Networks

Pebbles Bookkeeping took over our bookkeeping when a full-time member of staff left the business.  Our accounts are relatively complex for a business our size because of the number of different suppliers and products we deal with, but Pebbles were able to get quickly up to speed.  We have significantly reduced our costs spent on bookkeeping activity as a result. They have also helped us move to a new accounting system (Xero), which we are already seeing the benefit of, and we’re looking forward to working with Pebbles in the future to automate more of our back-office processes.

Anne-Marie Armstrong, Amberry Marketing

I just wanted to thank you both for the help you’ve given me thus far in setting up my new cloud-based bookkeeping system ‘Clearbooks’.

Having used Microsoft Excel for more years than I care to admit, I had more than a few reservations when considering changing the way I managed my books, yet understood that I had to make the change sooner or later.

After an intense training session with Sean, (where I probably asked 101 questions), my fears quickly dissipated and I can honestly say that although it’s likely to take me a little while to really get to grips with the new interface, I’ve no doubt that this simple system will save me so much time and hassle in future.

And less time spent doing my books, almost certainly means more time with the family and an end to rushing around like a mad woman at quarter-end!

Thanks again and I’m looking forward to working with you again soon.

Nick Aldrich, Only The Brave

Only The Brave have used Pebbles Bookkeeping for a few years now and we treat them instinctively like an integral department of our business.

I have worked with Sean for over two decades in my previous businesses and when Sean and Diane went on their own it was a no brainer to get them involved with our day to day accounting.

Pebbles manage our bookkeeping, expenses, credit control and PAYE and have a keen eye for detail and help us spot important financial matters before they become issues.

Their integrity and honesty are unquestionable and as a result, Pebbles are an asset to our business and will continue to work with us for many years to come.

Wayne Dinning, Managing Director, SD Waste Paper Limited

Diane has been providing her services to my company for approximately 6 months now and I can honestly say that due to her assistance, my company is running a lot more smoothly than it has at any time over the previous 30 years that it has existed.

I would just like to say that I would recommend her services to any business, whatever the size, as I can only see that her services would be beneficial to any company that may choose to employ her services.