One area that seems to create a certain amount of confusion amongst small business owners is what kind of records do they need to keep and for how long ? This has become a rather more important issue of late following HMRC’s decision to introduce a program of Business Records Checks on small and medium sized businesses starting at the end of last year. Presumably HMRC feel that small businesses need some education on this point, though some commentators have suggested that it’s also an indirect way of carrying out an inspection to see if the true amount of income is being declared.
HMRC do provide a helpsheet giving advice on this area as well as a list of third party record keeping apps that may be of use, though they don’t endorse any of them specifically. I’d suggest you try different ones out and see which works best for you. Users of cloud accounting software such as Freeagent or Xero have a facility within the software to log third party receipts and just about everything else HMRC might ask for will be available within the software, i.e bank statements, sales invoices, vat returns, another good reason to have a look at moving to the cloud.