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Record Keeping – Do not Rely on Bank Statement Alone

Some people in business would want to believe that their bank statement is enough to present as a true record & presentation of their business affairs.

Well HMRC will disagree strongly with that point of view on the simple fact that;

1. A bank transaction doesnt show the exact product that was bought in the shop. The purchase may not necessarily qualify as a deductible expense to them so a mere bank entry is not proof enough as a business transaction.
2. A bank transaction does not split the products into appropriate categories. You can go in Tesco & buy engine oil for your business car and stationery. The bank will show a single amount and will not classify that amount appropriately for correct disclosure.
3. If your business is VAT registered, a bank transaction doesnt show how much VAT you paid in any transaction. Only a receipt will show the correct amount of VAT claimable from HMRC