Self employment

If you are self employed, you must keep detailed records. The information contained in financial statements and your accompanying tax return must be retained for a minimum of 5 years from the 31 January following the year of assessment.

What type of records should be kept?

You should retain records of:

• all business receipts, e.g. sales, fees etc. when they arise.
• all payments made for stock purchases and day to day business expenditure.
• all purchases and sales of equipment and other assets used wholly or partly for the business.
• all bank statements etc.
• all amounts taken from cash receipts or the business bank account for personal expenditure.
• all personal funds used for meeting business expenses, or paid into the business bank account.
• all goods taken from the business for personal use.
• business and personal mileage in any vehicle used for business purposes. If a car, not owned by the business, is used for business purposes, details of amounts spent on servicing, repairs, fuel etc should be kept. A proportion of these costs should be allowed as a deduction.

Further details are available on the HM Revenue and Customs site.