Can anyone explain the electronic records thing for HMRC to me please?

[KatyMac]

DD is about to go self employed - and I need it explained fairly slowly!!

Can I use an excel spreadsheet or does she (that means me) need to buy something or are there free ones

Getting her to keep/record receipts/purchases has been hard enough - aarrgghh!

[pacer142]

Unless the "books" are really simple and/or you're competent with a spreadsheet, then I'd suggest not to use one. I've seen far too many spreadsheet foul ups - i.e. columns not adding up, calculations not updated after transaction additions/edits etc.

There are plenty of free/cheap software out there. For very simple recording of in's and outs, there's a free electronic "cash book" from //www.vtsoftware.co.uk which is very well regarded and well used by book-keepers and accountants. Not only is it simple, it's also very easy to correct errors. If you want online/cloud, then have a look at SageOne which is about a fiver per month and is also very simple (far more user friendly than previous Sage versions)

Unless the business is VAT registered, you don't need to worry about HMRC's "making tax digital". It won't be coming in for non VAT registered businesses for several years, if at all.

[KatyMac]

Oh lovely it's just VAT registered - phew!

I should be fine with a spreadsheet - I may set up something so she can enter stuff herself without altering any calculation.......actually let's be realistic she'll give me a bag of receipts and I'll do it!

[AlexanderHamilton]

I think a spreadsheet will be fine but she MUST keep receipts & there are a few things specific to her industry she can claim for.

I don’t like cloud based software, too many issues with it at the moment.

[KatyMac]

Yes I am training nagging her about that

[Lonecatwithkitten]

She/you need to be aware of the likely tax bill she will have after her first tax return due to paying tax on account ie. paying for the previous year and an upfront payment on the current year.

[pacer142]

I don’t like cloud based software, too many issues with it at the moment.

What issues? I've been using it in my accountancy practice and clients have been using it for 15 years. Neither myself, my staff nor my clients have experienced any kind of problems that we havn't had with desktop accounting software. In fact, at least with cloud software, the updates and enhancements are done for you. Our biggest issues with desktop software were the updates which sometimes really beggared up your system requiring reinstalling backups etc. I'd genuinely be interested to know what "issues" you've experienced and which products you were using. ( I know there have been some cheap/free cloud products that have been pretty poor as regards functions/support etc., but most of the popular big name ones seem fine).