I often meet people who say “my business is too small to need an accountant” or “I will do it myself until I’m busier”. There is absolutely nothing wrong with this (like many things it is another overhead for small business) – but there is an opportunity cost to not using an accountant or a bookkeeper. If you’ve tried reading the HMRC website it isn’t written in the most user friendly way, and the thought of filling in a tax return means many are left until the last minute. Once you are VAT registered there is another whole host of things to catch you out.
The most important thing is to keep your records straight. As Accountants we all have the “Shoebox Client” who turns up once a year with a box full of receipts, possibly some bank statements, and their only requirement is to pay as little tax as possible. HMRC has an issue with cash-based businesses, or where the records are not maintained.
Here is a useful link to understand what HMRC expect your business to keep – http://www.hmrc.gov.uk/dealingwith/bus-record-checks.htm
For straightforward businesses a simple spreadsheet is sufficient. Where things are more complex there are lots of bookkeeping packages available, if you need any advice in this area we are more than happy to help.
My biggest tip would be GET A VAT RECEIPT! Even if it’s coffee for a meeting, parking, kit from Amazon – get a receipt to prove what you bought and why it is business related. Check all receipts to the bank statement and keep an analysis of income and expenditure. If you keep the basic records your Accountant will love you!