MEETING YOUR INDIVIDUAL BUSINESS NEEDS
BOOKKEEPING
- Comprehensive Record Keeping
- Purchase & Sales Ledgers
- Nominal Ledger
- Payments & Receipts
- Control Accounts
- Bank, Credit Card & Cash Reconciliation
- Trial Balances
- VAT Records
- Invoicing
- Cheque Payments
- Year End
Keeping Records: A Quick Guide
If your company or organisation is liable for Corporation Tax, you must keep and retain adequate business and accounting records to file an accurate Company Tax Return and calculate how much Corporation Tax you need to pay.
This guide gives an overview of the records that you need to keep for Corporation Tax purposes. It explains how long you normally have to retain them for and when you may have to retain them for longer than usual. It also explains what happens if you don't keep adequate records or retain them for long enough.
Record keeping (partners and partnerships)
As a member of a business partnership, you're taxed on your share of the business profits - so you must keep accurate records. By law, you must keep business records for at least five years from the 31 January following the tax year for which the tax return is made. A penalty of up to £3,000 can be charged for each failure to maintain or retain adequate records to back up a tax return.
You should keep your business and personal records separate - it's a good idea for the partnership to have a separate bank account. It's the responsibility of all the partners to make sure the partnership keeps accurate records. Every partnership must have a nominated partner - one of their jobs is to use the business records to fill in the partnership return.
Record keeping (self-employed)
By law, you must keep business records for at least five years and ten months after the end of the tax year the records relate to. You can be charged up to £3,000 for failure to maintain or retain the records you need to make a tax return.
You'll need to keep your business records and personal records separate. Most businesses find that it helps to have a separate business bank account.
Record keeping (individuals and directors)
If you're a UK taxpayer you should keep a record of the tax you pay each year and other records relating to your income. You'll need these if asked to complete a tax return or if you need to provide information on one you've already completed.
PAYROLL
- Preparation and Processing of weekly, fortnightly or monthly Payroll
- Calculation of PAYE & NHI contributions
- Payments due to Employees and HMRC
- Calculation of Holiday Pay based on either contractual or averaged earnings
- Calculation of SSP (Statutory Sick Pay)
- Calculation of SMP (Statutory Maternity Pay)
- Calculation of SPP (Statutory Paternity Pay)
- Calculation of SAP (Statutory Adoption Pay)
- Calculation of Attachments of Earnings Court Orders
- Deductions of Child Support Agency Deductions
- Student Loans
- Maintenance of Statutory Payroll Records (P11 & P32)
- Starters & Leavers: Provision of forms as required (P46, P45),
- Students (P38)
- Production of Year End Returns (P35, P60/P14)
- Period Payroll Reports & Summaries
- Payslips
- Payment Analysis: Provide you with coin, cheque or BACS analysis for each period if required.
PAYE record keeping
As an employer, you'll usually need to deduct Income Tax and National Insurance Contributions (NICs) from your employees' pay and send the amounts you deduct to us each month or quarter. This system is called Pay As You Earn (PAYE).
It's essential to keep accurate PAYE records to ensure that:
- You and your employees are paying the right amount of tax and NICs
- Your employees are getting any statutory pay they're entitled to
- You're complying with legislation like the National Minimum Wage
You'll also need these records so that you can file annual PAYE returns and provide supporting paperwork if asked for by HMRC.
You must keep PAYE records for the current and previous three tax years.
Important updates and changes:
Starting with the 2009-10 tax year, almost all employers must file their Employer Annual Return (P35 and P14s) online. Employers with 50 or more employees must already file these forms online, while under government proposals employers with fewer than 50 employees must file them online from April 2011.
Penalties for failing to file PAYE online
Almost all employers are now required to send their Employer Annual Return (form P35 and forms P14) to HM Revenue & Customs (HMRC) online.
There are separate deadlines for sending a number of in-year PAYE forms, including P45 and P46, online. Employers with 50 or more employees must already file these forms online, while under government proposals employers with fewer than 50 employees must file them online from April 2011.
If you send any PAYE forms by paper or magnetic media when you're required to send them online, you will face penalties. These penalties will still be due even if you subsequently file an online version of the form(s) for which you've been penalised.
Penalties for failing to file your Employer Annual Return (P35 and P14s) online
The precise amount of the penalty depends on the number of P14s included in your return and is up to a maximum of £3000.
The penalty applies regardless of whether you've filed your return on time or late. And it will still apply even if you try to put things right by filing your return again online.
Penalties for failing to file your in-year forms online:
It is becoming compulsory for most employers to file the in-year forms P45 Part 1, P45 Part 3, P46, P46 (Pen), P46 (Expat) online. If you do not file online when required to do so, HMRC may charge you a penalty. The penalty will range from £100 up to a maximum of £3000 depending on the number of forms that should have been filed online. The first penalties will be issued for the quarter ended 5 April 2010.
The deadline for filing these forms online differs depending on the number of employees in your business:
VAT RETURNS
- VAT Reconciliation
- Preparation of Quarterly VAT Returns
Accounts and Records for your VAT
If you are registered for VAT, you must keep certain business records and VAT records of your sales and purchases. You must also keep a separate summary of your VAT, called a 'VAT account'.
There is no set way of keeping these records and accounts. In most cases, they can be easily adapted from your normal business records. The main thing is to ensure that they are complete and up to date and that it is easy for VAT officers to access them when you have a VAT inspection.
HM Revenue & Customs (HMRC) is phasing out paper VAT Returns. From April 2010 you may have to submit your VAT Returns online and pay any VAT due electronically (for example by Direct Debit, internet or phone banking etc). If you are affected by this, there are things you need to do now.
Who has to switch to online VAT Returns?
From 1 April 2010 you will have to submit your VAT Returns online and pay any VAT due electronically if either of the following applies:
If you fall into either of the groups mentioned above, you will have to file all your VAT Returns online (including nil and repayment returns) even if your turnover drops below £100,000 in the future.
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