Bookkeeping for Self Employed

Are you looking for bookkeeping for self employed? If you are either a sole trader or in a partnership, you will need to register as self-employed with HMRC. You will be required to complete a self assessment tax return on an annual basis. Read our information on registering as self employed.

On a self-assessment tax return, unless you have profits over £85,000, you do not need to complete a full profit and loss statement. As a business, it is useful to have all the figures available so you can see the full picture of your income and expenses.

Do I need a separate Bank Account?

Although you do not need to have a separate bank account it is recommended for the following reasons:

  • Keeps your personal and business finances separate
  • You know how much money the business has
  • It is easier to produce accounts only using business figures
  • If there is a problem with the bank account, the other account is still in use

Bookkeeping Paperwork

It is important to keep all your self-employed paperwork. Paperwork needs storing for six years. There are a few simple tips to help get you started.

  • Print off all documents as you either produce or receive them
  • File everything away in date or alphabetical order. It is worth keep sales and purchase invoices separate.
  • Keep a small wallet or envelope while out and about to store receipts or photograph them
  • Keep track of all mileage, as you can reclaim it.
  • Read our section on business expenses to see what you can reclaim. A free expense template is available to download.

Bookkeeping for Self Employed

Bookkeeping for self employed how to complete accounts

There are several options for completing your accounts; it is worth taking some time to research the best method.


There are lots of different software packages available; most have a free trial. Some of the most popular ones are Sage, Xero and Quickbooks. For self-employed accounts, we like Quickbooks as it has some additional features including:

  • Invoicing on the go. When you have finished a job, you can complete and email the invoice from a mobile device
  • It keeps track of all your miles to claim expenses
  • Keeps track of how much tax you owe
  • Photograph receipts

Read our article on the best accounting software for self-employed to find the best one for the business.

Microsoft Excel

Another option is to use an Excel spreadsheet. We have produced a cash book template that is easy to use, different categories can be set, and it records all your income and expenses over the year. We have also produced a cash book with a budget. It allows you to set a budget for the year and post all the transactions; the total will compare the budget to actual figures.


If you prefer to complete all your records by hand; ledger books and pads are available making it easier to record the transactions.

Do I need an accountant?

You can complete your self assessment tax return yourself if you feel confident. In most cases, it is recommended to use accountants services. Their prices might not be as high as you expect, try and find someone offering a fixed rate fee. The main advantages of using an accountant are:

  • They are trained to complete accounts and have to keep knowledge up to date
  • Savings may be made on tax
  • They can offer good advice on your business

Further reading on bookkeeping for self employed can be found on bookkeeping basics.

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