Record keeping

Whatever type of business you start, there is now a statutory requirement to maintain business records to enable you to accurately declare your business income and expenditure. 16aIn theory, you could be charged a penalty of up to £3,000 for failing to maintain proper accounting records, although in practice, this penalty will only apply to persistent failures or when an individual deliberately destroys the business records to prevent the Inspector from conducting an enquiry.

Essentially, the statutory legislation does not prescribe what type of records you should ‘create’ however, it does say that financial records created by your business should be retained for 6 years.  The records that you maintain should assist you to declare your income and expenditure to be verified by HM Revenue and Customs.6a

 

Service Businesses – Records of Income

Where you are providing services to customers, you should maintain copies of all invoices issued.  These can be either hard copies or retained electronically.  Ideally, the invoices should be consecutively numbered although, as a word of warning, if you do have consecutively numbered invoices, do not use them for any purpose other than ….