Sole Trader and Online Payments !!

[BCstartup]

Hi,

I have just registered as a sole trader (with help from some very kind people on this forum !!) and now need a bit more advice.

Most of the payments I receive are through PayPal. I invoice the customer, then they pay into my PayPal account, and then I send this money to my bank account.

What paper records do I need to keep of this? At the moment I have just been keeping the invoice, and then stapled to it the paypal receipt (as this details the date, amount and cost of receiving the payment.)

Do I need to keep a record of this money being transferred into my (personal) bank account? Or will the invoice and the receipt be enough to work out income/expenditure at the end of the year?

Thank you all very much, sorry if the question is old/obvious !

Really appreciate any advice

[Maslins]

The invoice & receipt will be adequate. Whether you leave the funds in your Paypal account or withdraw them makes no difference to your annual profit, which is what you will be taxed on.

You do not need to keep a full balance sheet for your accounts, a mere profit & loss account will do.

[Christiane]

I've never kept any paper records of the sales invoices. I download the history from Paypal at the end of the month. Otherwise I'll have a shed full of invoices!
Never been a problem for my accountant.

You might want to open a free business bank account (Alliance & Leicester or Abbey) if you've just registered, to keep all your records simple and not having to use your personal account.

[CassioAcc]

What you have is fine however I would keep different Personal and Business accounts. This will make it easier to identify your business profits.

[MyAccountantOnline]

BC - if you are going to use an accountant it would be a super time to speak with them now to make sure you minimise your fees by keeping the records the way that will help you both. You dont want to be spending hours keeping unnecessary records, or records which wont help your accountant.

[MyAccountantOnline]

This might be of interest -

http://www.hmrc.gov.uk/sa/rec-keep-self-emp.htm

[KateCB]

Also, it can be considered breach of terms if you use your paersonal account for businesses use - they can close the account without notice or sispend its use until they investigate - get a business account to be safe and sure and most of all so that you money and the companies money are completey independent.

Kate