How many businesspeople forget to collect receipts for their day-to-day buiness spending?
Don't they realise that every £10 or $10 of receipts can equate to £2.50 or $2.50 saving on their tax bill?
It's easy for the tax authorities to check or confirm the income part of the taxable income part of the equasion. Most couldn't care less if expenditure has been omitted. Naturally, many tax inspectors are kinder than that, and will point out obvious missing expenditure.
If you are forgetful about asking for receipts, especially for cash expenditure, then get yourself a pad of voucher forms, available from most stationers. For most types of expenses, this form can be used as a valid substitute documents for up to £100 in value.
With cash expenditure receipts, vouchers or the above forms, it is wise to number them sequentially, and retain them by month, in an envelope. Best way to preserve the sequence is to use treasury tags ("green strings"). Each piece of paper should show it's date, amount and what type of expense it was. Examples are travel, advertising, subsistence, vehicle.
Self-employment is a paper chase. Happy hunting!
