When you run your own business, most of your effort naturally goes into the day-to-day work of organising staff, orders and invoices, and keeping track of stock and supplies. You also have to work on your marketing, to keep existing customers and attract new business.
Keeping on top of your accounting paperwork can seem arduous on top of all that, and it’s easy for it to be left to the last minute. Before you know it, tax return deadlines are on the horizon and you need to spend time and effort gathering a year’s worth of paperwork and collating your figures.
Whether you’re using traditional accounting or cash-basis, there will be paperwork that needs to be kept accessible and organised to avoid falling foul of strict accounting rules. Make 2024 the year you develop easy-to-maintain storage and organisation systems for your business accounts - here’s some information and suggestions to help you get started.
Deadlines for tax returns
There are some important deadlines you need to always keep in mind if you need to submit tax assessments for your business. These dates need to be clearly flagged in your calendar
so that you have plenty of time to get organised and never miss a deadline - stiff financial penalties can apply if you’re late!
For your ease of reference, the important deadlines are:
- 5th October - tell HMRC if you’re going to need to complete a tax return, if you’re a new business and haven’t completed a tax return before.
- 31st October - send in a paper tax return, if you don’t use the online self assessment system.
- 30th December - submit your online tax return if you want HMRC to take your tax payments from your salary or pension.
- 31st January - send in an online tax return if you do your self assessment online and intend to pay tax owed without it coming off your payslip.
- 31st January - pay the tax you owe if you haven’t arranged for it to be collected from your salary or pension.
Doing everything online is much quicker and easier, and you’ll always have a digital record of what you’ve sent to HMRC without having to keep paper copies.
Remember that you don’t have to wait for the deadlines if you have the information to hand, and it’s usually best to file your returns well in advance (in case of unforeseen problems such as losing access to the internet on the deadline day!). The financial year runs from 5th April to 4th April, so this year if you have all your figures for April 2023 - April 2024 ready by, say, June 2024, why not file everything then rather than wait till 31st January 2025
DIY Tax Returns
So, we’re at the start of a new year and the online tax assessment deadline of 31st January is looming. If you’re not using an accountant, now is the time to make sure you have everything ready for submitting your tax return for the current financial year.
The documents you need to submit your online tax return will depend on what type of business you run, whether you employ staff, how much your turnover is and whether your accounting period matches the financial year (5th April - 4th April). Here is a list of the documents you’ll need to have to hand if they apply to your business:
Details of all income:
- P60 / P45 / P46 if you also work for an employer.
- Pension statement if you draw a pension.
- Interest statements from your bank accounts.
- Statements of any shares or dividends received/paid.
- All invoices sent to customers and paid.
- Details of any redundancy payment or payout following a termination of employment.
Details of all expense:
- All wage slips for employees.
- P11D (for employment benefits given to employees aside from their salary) and P9D (for any employee paid less than £8500 per year) if applicable.
- Receipts for all stock, equipment, uniforms and tools/machinery purchased.
- Details of business mileage and other business expenses (e.g. stationery, insurance costs, advertising expenses, utilities, rent - including storage fees).
You’ll also need to keep a note of any gift aid payments you might have made during the year, and if you’re claiming Married Couples Allowance you’ll need your marriage certificate
This is not an exhaustive list - just keep in mind that any money you receive and any money you pay out will need to be accounted for and you might have forms or statements that are unique to your circumstances that you’ll need to be able to produce or refer to when submitting your tax return.
If you decide to use an accountant, they will need all of those documents from you and can advise on what other information they might need. They will cost in the region of £200 - £300 for a basic tax return service but this will vary depending on the nature and size of your business.
Keeping everything organised
Storing business digital paperwork
So much paperwork can be digitised now. Try to get into the habit of scanning receipts and filing them in a proper system. If you have access to online storage such as the Cloud or OneDrive, use those so that you don’t have to worry about loss or damage to your laptop or PC - it will all still be there if you need to access it (securely) from another device.
Create password-protected folders to store your scanned documents or those you receive / send electronically. Have a master folder called 2024-2025 (or whatever the current tax year is), with subfolders for income, expenses and employees.
Try to get into a habit of setting aside an hour a week to update an Excel or Google Sheets record listing things like invoices delivered and paid and expenses paid out so that you have a running record of how much is coming in and out of your business each week. There are also online accounting tools you can use for a subscription fee (which itself can be deducted as a legitimate business expense).
Storing business hard copy paperwork
Paper copies of receipts etc that are not digitised will need to be kept securely to maintain confidentiality. You’ll also need to ensure that they’re as safe as possible from risk of fire, flood or pests because if you lose your only record of tax documents you’ll need to recreate them and that can be very time consuming and difficult.
If you’re a limited company, there will be hard copy paperwork that you have to keep by law for (usually) 6 - 10 years, and this could be kept alongside your annual tax information.
Archive storage can be done in your office if you have secure space, or you could rent a self storage unit with us. We have units ranging in size from 10 sq ft lockers (about the size of a car boot, which is usually ample for a small business to keep boxes of paperwork) up to warehouse-sized rooms. They’re indoors, accessible only by you, and our stores are covered by CCTV, fire prevention and pest protection systems.
How long to keep business account paperwork?
Usually, you’ll need to keep your business paperwork for 6 years from the end of each accounting period if your business is a limited company, or 5 years if you’re a sole trader/unlimited company.
A buildup of 5 or 6 years’ worth of paperwork will take up a lot of space in your office, so it’s definitely worth considering offsite archive storage. If you think we can help, and would like to discuss arranging business storage at your local Safestore, give us a call or chat with us online for helpful, no-obligation information today.