Up-to-date records also give you the information you need to manage your business and help it grow. They will make it easier to get a loan, if you need one, and may support your claim to some tax reliefs or capital allowances.

Invoices, receipts and deductions

You should keep invoices and receipts to show what you have bought or sold relating to your business. If you are employing others, you must keep records of their wages and the tax and National Insurance you have deducted and paid to HM Revenue & Customs (HMRC). You need to show clearly what you have spent personally and what you have spent on your business.

If you use cash, you should retain till receipts and a record book to keep track of it all. If you are using part of your home for business then you should keep copies of utility bills, so that you can work out the amount spent in relation to your business.

Update information regularly

You should update the information regularly – if you don’t you may face a penalty for failing to keep adequate records.

What records do I need to keep?

Whether you are just starting out in business or you are already up and running, Business Link’s online record checker will tell you which records you need to keep and give you feedback on any improvements you need to make. Go to www.businesslink.gov.uk/recordkeepingcheck.

We’ve also produced a basic factsheet on record-keeping that covers self employment, contracting in the construction industry scheme, partnerships, VAT, employers and limited companies. See www.hmrc.gov.uk/factsheet/record-keeping.pdf

Detailed guidance on record-keeping - covering what type of records you may have to keep, common problems and examples for different types of business - can be found at www.hmrc.gov.uk/sa/rk-bk1.pdf

And for details of how to set up a basic record-keeping system go to www.businesslink.gov.uk/recordkeeping.

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