Getting into the habit of thorough record keeping for your business will certainly set you in good stead when you work from home and, as you are quite likely to be self-employed, you are also legally required to keep records for your business and any other income you receive.
At the very least, you will need to keep track of invoices for sales and purchases, receipts for business expenses and bank records. In the long-term, you will find that getting on top of your business records will help you to work from home more efficiently. But to begin with it is essential for tax purposes.
When it comes to filling in your tax return at the end of the tax year, you will need your accounts, evidence of tax that has been paid and other records relating to your income and outgoings. A lot of people find that it is easier to start a separate folder and keep all business-related transactions here as this information will need to be kept for longer than most personal financial records.
You can hire an accountant to help you if you are struggling to know what to keep. But a record of all your sales and takings and a record of all your purchases and expenses are the main essentials to keep track of. These can be made into a profit and loss account of your business for the year, helping you and the tax man work out what needs to be paid.
But if you want to make sure all of your bases are covered, HMRC recommends keeping an array of records that could relate to your business. Included among the extras are a petty cash book, a wages book, invoices and receipts issued and received, an electronic record of sales or till rolls, hire purchase and leasing details, bank and building society statements and details of any money taken out of the business for personal use or any private money brought into the business.
These will not be relevant to everyone but it is worth thinking about which could help you to complete your Self Assessment tax return at the end of the year.
If you are not self-employed and are working from home for a company based elsewhere, make sure that you are aware of all the expenses you are incurring at home whilst working for the company. The company should reimburse you for most, if not all, of these expenses. Exactly what expenses the company is paying for should be clearly spelt out in your contract.
