What records do I have to keep?
By law, everyone must keep records of their income, and of any ‘capital gains’, for at least 22 months after the end of the tax year – and if you are self-employed as a sole trader, you’ll need to keep these records for at least five years and ten months after the end of the tax year.
We’d always recommend that you manage your finances in an organised fashion from Day One – in fact, as a self employed person it’s a legal requirement. That doesn’t necessarily mean investing in expensive accounting software, unless you feel you really need it – but instead, at a most basic level, keeping a record of every payment you receive from a customer and every business expense you have. If you enter everything into a simple spreadsheet in Microsoft Excel, you’ll always know where you stand.
You’ll need to keep copies of every invoice or sales receipt and every expense receipt. Keep these somewhere safe, filed either by month or by customer – whichever works best for you – and make sure that you can find any individual piece of paper whenever you need it.
Downoad our free Bookkeeping Spreadsheet
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