Record-keeping requirements for freelancers and small businesses in the UK

The laws and regulations regarding bookkeeping and accounting for freelancers and small business owners in the UK include:

a. The Companies Act 2006: This is the primary legislation governing the accounting and financial reporting requirements for companies in the UK. It sets out the obligations for maintaining proper accounting records, preparing financial statements, and filing them with the relevant authorities. The Companies Act 2006, Chapter 2, specifies the requirements for bookkeeping and accounting for companies.

b. The HM Revenue and Customs (HMRC) provides valuable guidance for self-employed individuals in the UK regarding record-keeping requirements. You can consult the law here.

c. The Small Companies and Groups (Accounts and Directors' Report) Regulations 2015: The Small Companies and Groups (Accounts and Directors' Report) Regulations 2015 sets out the requirements for small companies to prepare and file their annual accounts with Companies House. It includes provisions related to the format and content of financial statements, the preparation of directors' reports, and the timing and filing of accounts.

While the law does not explicitly address record-keeping requirements, it indirectly emphasizes the importance of maintaining accurate and complete records. Proper record-keeping is essential for the preparation of reliable financial statements and directors' reports that comply with the regulations outlined in the law.

d. The Value Added Tax (VAT) Regulations 1995: If a freelancer or small business owner is registered for VAT, these regulations specify the record-keeping requirements for VAT purposes. Under these regulations, businesses must maintain records that include details of their sales and purchases, VAT invoices issued and received, and any adjustments or corrections made to VAT returns. These records should provide a clear and auditable trail of VAT transactions, enabling accurate reporting and compliance with VAT regulations.

The law also outlines the retention period for these records, which is generally six years from the end of the VAT accounting period to which they relate. It is important for businesses to retain these records for the specified period as they may be required for VAT inspections, audits, or to resolve any disputes with HM Revenue and Customs (HMRC).

It's important to note that the specific sections and provisions within these laws and regulations outline the requirements for bookkeeping and accounting. Consulting with a professional accountant or seeking legal advice can provide more comprehensive and up-to-date information tailored to your specific circumstances.