Self Employed Bookkeeping: What Records to Keep

A sole trader should keep records of every sale and source of business income, every business expense, and the proof behind each entry, such as invoices, receipts and bank statements. The records must be accurate enough to complete a Self Assessment return and explain the figures if HMRC asks.

This guide walks through each part in everyday language. It is general information, not tax advice. Check the official sources below for current rules.

Why do sole-trader records matter?

Sole-trader records do three jobs.

First, they let you work out your profit for the year. Second, they back up the figures on your tax return. Third, they protect you if HMRC ever asks how you reached a number.

A total on its own does not do the third job well. A total with the receipt, invoice or note behind it does.

1. Records of money coming in

Keep a record of every payment you receive for your work. That includes:

Invoices you have sent to customers.
Payments you have received, with the date and the amount.
Any other business income, such as cash sales or payments through an app.

If a customer pays you without an invoice, write down what the payment was for. A short note is enough. Future you will not remember a single payment from eleven months ago.

2. Records of money going out

Keep a record of the costs of running your business. Common examples include:

Materials and stock.
Tools and equipment.
Software and subscriptions.
Phone and internet, for the business share.
Travel for work.
Insurance and professional fees.

For each one, record the date, the amount, who you paid and what it was for. Whether a cost can be claimed against your tax is a separate question. Check gov.uk or ask an accountant if you are unsure.

3. The evidence behind each record

This is the part people skip. It is also the part that matters most.

Evidence is the proof that a record is true. Usually that means:

The receipt for an expense.
A copy of the invoice you sent.
A bank or card statement line that shows the payment.
A short note explaining anything unusual.

A line in a spreadsheet that says "£40, supplies" is a claim. A line with the receipt attached is a record.

4. Records for mixed personal and business spending

Many sole traders use one account for everything. That is allowed, but it makes your records harder to read.

If you do this, mark each item as business or personal when you record it. Do it soon after, while you still remember. Sorting a year of mixed transactions in one sitting is where most people lose time.

For items you use for both work and home, such as a phone, note how you worked out the business share.

5. Other records worth keeping

Depending on your work, you may also need:

Mileage logs for business journeys.
Records of any home working costs.
Contracts or written agreements with larger customers.
Details of money you take out for yourself.

Not every sole trader needs every item. If one does not apply to you, ignore it.

How long should a sole trader keep records?

For an on-time Self Assessment return, keep business records for at least five years after the 31 January submission deadline for the relevant tax year. Different deadlines can apply to late returns, and rules can change, so check HMRC's current record-retention guidance. Our receipt-retention guide covers the practical side.

A simple habit that works

You do not need a perfect system. You need a steady one.

Record each sale and cost when it happens, or at least weekly.
Attach the receipt or invoice straight away.
Add a one-line note when something is not obvious.
Look over the month before it ends.

Ten minutes a week is easier than a full weekend before a deadline.

Paper, spreadsheet or software?

Paper and spreadsheets can work. They struggle when the receipt is in one place, the figure is in another and the note is in your head.

Software helps when it keeps those three things together. BookPilot is built around that idea. Each record holds its receipt, its notes and its review status in one place, so you and your accountant can see the proof without hunting for it.

BookPilot is currently an early-access release for Windows. There is no Android app yet.

Related guides

Official sources

A calm way to start

If you would like your receipts, notes and records kept together from day one, take a look at BookPilot. It is early access, and we are open about what it does and does not do yet. Founding access is available on the BookPilot website.

General information only, not tax advice. Rules and dates change, so check GOV.UK for the current position. Read how BookPilot's guides are prepared and reviewed.

What records should a sole trader keep?