Keeping your paperwork for HMRC in order is an unavoidable part of being self employed. However, with a few simple tips and a bit of technology, you can organise your business receipts much more simple and less painful.
HMRC states that you must keep your all your business paperwork, including your business receipts, for six years. Business Paperwork is a term which covers all the paperwork you receive. It also includes the ones you send out in relation to all the income & expenses in your business. These include:
- Bank statements
- Customer Invoices
- Supplier invoices
- Cash expense forms & receipts
- Business credit card statements & receipts
- Mileage claims
- Statements detailing your online earnings like eBay Statements, Paypal account and Etsy income
Why You Need to File Your Business Receipts
Although it is easy to ignore dealing with your business receipts, without an effective system for filing your business paperwork you may have moments in the month when you feel like drowning in paperwork. Or, maybe it happens when tax time comes you may lose out on tax relief on your expenses.
In order to claim for tax relief on any expense, you must have a receipts filed to back up your claim. These should preferable made out to you and your business name.
HMRC now accept scanned copies of business paperwork, which is great because it avoids storing loads of paperwork. So, you can now scan and save PDF of your business paperwork in something like Dropbox and Google Drive. Just make sure wherever you choose to save your files that it is backed up so you organise business receipts efficiently. The key is to set up your file structure neatly to make it easy for you to store your scans.
If you are out & about take a photo of your receipts. This is so you have a copy stored ready for you to fill out your cash expense claim. The Google Drive app has an option to take a photo within the app. This means your receipt is automatically snapped and saved in your Google Drive.
Scanner for Me is another app which allows you to take photos of your business paperwork and email it or store it as a PDF.
There is no right and wrong way to set up your cloud file structure for saving and organising your business paperwork online. Therefore, you may need to do a little trial and error to find the right solution for you.
Let’s suppose we are storing receipts for the tax year 2018/2019 (6 April 2018 to 5 April 2019). Here is an example of how the file structure in Google Drive or Dropbox may look: