Basic records you must keep
You must keep records so that you can fill in the tax return fully and accurately.
Your basic business records must include:
- a record of all your sales and takings - i.e. all of your self employed earnings
- a record of all your purchases and expenses
The tax that you pay is based on your income less your deductable expenses. It is therefore important that you start to keep all receipts.
Records should be simple. You only need to record takings in one column and list expenses. As long as you can clearly see where the total annual figures declared on your tax return come from that should be sufficient. The more detailed records you keep, the easier it will be to answer any questions that HMRC may have about your tax return. If you keep simple and complete records you will be able to complete your tax return easily at the end of the year and should not require the assistance of an accountant.
Remember that records should be organised in accounting periods of, normally, 12 months and that your tax and Class 4 NICs are calculated on your business profits – not on your turnover/ income.
Dancers should be showing total income generated less day to day running costs and business expenses. Expenses could include:
- outfits used specifically for work,
- phone – business only or apportioned if business/ personal use,
- make up –if used for business only, a separate make up bag perhaps
- premises – if rented or organised on own behalf
- pole lessons, pole, grip
- house fee
- cosmetic surgery – dependant on apportionment personal to business and a justifiable business need,
- advertising services
- business use of car,
- taxi journeys to and from work
- personal liability insurance
- fee to join union
Any business expense would be ‘allowable’, depending on the business need. Any private / personal use of a business items would be ‘disallowed’.
Useful links to record keeping are as follows:
- Find out about Self Assessment record keeping for the self-employed
- Use the record keeping tool on the Business link website