Keeping financial records as a sole trader
Good financial records are essential if you run your own business as a sole trader. Known as bookkeeping, the process involves recording all your business transactions, income, expenses, and any assets such as equipment, or liabilities such as loans.
Maintaining accurate bookkeeping records is essential for every business. These records form the basis of your Self Assessment tax return to HMRC, helping you pay tax correctly and claim tax relief on allowable expenses. Keeping accurate bookkeeping records also helps you keep track of your profits and losses, plan your cash flow, and make more efficient and informed business decisions.
What bookkeeping records do sole traders need to keep?
Smaller sole traders are only required to keep basic records of income and expenditure, also known as single entry bookkeeping.
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