PostHeaderIcon Business records

 

 Business records need to be kept until the fifth anniversary of the 31st January following the tax year to which records relate.

 Example:

 Your business records for 2008/09 need to be kept until 31st January 2015 (31st January 2010 plus five years).

 
What you need to keep will depend on your business – it may be as simple as a cash book and diary. You will need to record and analyze information to get the figures you need for your tax return. You may use a manual or computerized system for doing this.

 Examples of your documents and records:

  • invoices and receipts

  • bank statements – it often make sense to have a separate bank account to take your business income and pay out business expenses

  • records regarding wages and salaries, PAYE – when you have employees

  • cash book

  • other books and records regarding your business transactions


Failure to keep records can result in a fine of up to £3,000.

 

1. You are registered for VAT

 

If you are registered for VAT, then whenever you supply goods or services to someone else who is registered for VAT you must give them a VAT invoice.

Buyers can only claim back the VAT they have paid on their purchases if they have a valid VAT invoice from the seller.

If you are a retailer, you do not need to issue a VAT invoice or receipt unless your customer asks for one.

 

VAT invoices can be either in paper or electronic form.

 

A VAT invoice must show:

  • an invoice number which is unique and follows on from the number of the previous invoice

  • the seller's name or trading name, and address

  • the seller's VAT registration number

  • the invoice date

  • the time of supply (tax point) if this is different from the invoice date – this is the date when sale is considered to take place for VAT purposes.

  • the customer's name or trading name, and address

  • a description sufficient to identify the goods or services supplied to the customer

 

For each different type of item listed on the invoice, you must show the:

  • unit price or rate, excluding VAT

  • quantity of goods or the extent of the services

  • rate of VAT that applies to what's being sold

  • total amount payable, excluding VAT

  • rate of any cash discount

  • total amount of VAT charged

 

If you issue a VAT invoice that includes zero-rated or exempt goods or services, you must:

  • show clearly that there is no VAT payable on those goods or services

  • show the total of those values separately

You must normally issue a VAT invoice (to a VAT-registered customer) within 30 days of the date you supply the goods or services – or if you were paid in advance, the date you received payment. This is so your customer can claim back the VAT on the supply, if they are entitled to.

 

Examples of VAT invoices:

 

2. You are not registered for VAT

 

If you are not registered for VAT you must not issue a VAT invoice.

 

Example of not VAT invoices

 

 Find out more: http://www.hmrc.gov.uk/index.htm

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