If you are VAT-registered, you need to complete VAT returns and payments on a quarterly basis.You need to file a self-assessment income tax based on your income from your business.This involves receipts for expenses you have made and invoices for work that has been delivered. Generally, your basic bookkeeping responsibilities in the UK involve the following: Wages Book – Showing all salary payments and National Insurance contributionsįrom these you will be able to prepare your annual accounts which is a legal requirement for all limited companies.Purchase Ledger – detailing all expenditure.Sales Ledger – detailing all income and amounts still owed.The main things you will need to maintain a basic set of accounts are: It is also a legal requirement that you stay on top of your company’s accounting records and keep historical records for at least 6 years. Unfortunately things are not quite a straight-forward for limited companies as you will need to deal with a more complex set of circumstances such as dividends and PAYE as well as file annual accounts with Companies House.
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Get a free quote from a bookkeeper or accountant near you: Or choose one of our top-rated online accountants: This will then help you better manage your business and cashflow.Īs sole traders do not need to file any accounts, this is all you really need to do in terms of basic bookkeeping and a lot of it is just to make your life easier in the long-run. It’s also a good idea to break down income and expenditure into categories such as advertising costs, banking fees, etc. Your profit and loss account can be a simple spreadsheet detailing income and expenditure. It’s a good idea to set up a filing system and number your invoices and receipts so that you can easily track and record them. This means that using a simple profit and loss account and retaining copies of all invoices and receipts (so you can show the tax man should you ever get asked to prove your tax returns are accurate). When it comes to doing your tax return, you can just add these up and enter the figures in the appropriate place on the form. In essence, all you need to do as a sole trader is keep records of all of your income and all of your expenses. Subscribe On YouTube Basic Bookkeeping for Sole TradersĪs far as keeping accounting records go, sole traders have it far easier than any type of company.