Business Structures, Record Keeping & Accounting

There are different business structures you can operate under such as; sole trader; partnership; limited company or a co-operative.

You can find out more about the requirements and obligations of each format here: www.gov.uk/business-legal-structures.

Regardless of which business format you choose, you will need to let HMRC know that you have started to trade, and also keep proper records for your business. This means keeping all receipts, invoices and records such as bank statements, business diaries and mileage records for 5 years after your last tax return date.

You must be able to work out (and demonstrate) how much money has entered and left the business. This is both to enable the necessary returns to be provided to government agencies, and for you to see whether or not you have made a profit.

For accounting purposes, it is advisable to keep business monies separate from your personal money and to open a separate business account. HMRC provides free support, for example, through online webinars; see www.hmrc.gov.uk/webinars/index.htm. Webinars: allow real-time communications from one sender to many receivers. They can offer text-based messages, voice and video chat to be shared simultaneously. Applications for web conferencing include meetings, training events, lectures, or presentations from a web-connected computer to other web-connected computers.

You can also contact their Business Education & Support team on 0845 603 2691 to request to attend fully funded workshops on matters such as record keeping, doing self-assessment tax returns, taking on staff, setting up a limited company and operating with and accounting for VAT. If in doubt over these issues, you may wish to seek advice from a qualified accountant.

Business Plan