Record Keeping for Self-Employed Service Providers

A simple, low-effort system for tracking income, expenses and mileage so tax time is quick and you can prove every figure if asked.

Good records are the cheapest insurance policy a sole trader has. They make your tax return quick, help you spot which jobs make money, and give you proof if HMRC, a customer or a lender ever asks a question. Bad records mean an evening of rummaging through glove compartments in January.

You do not need accounting software or a qualification. You need a habit that takes a few minutes a week. This is general guidance; for what you must keep and for how long, check gov.uk.

What you need to keep track of

Think in four buckets:

Money in. Every payment you receive, with date, customer, job and amount. Include cash, bank transfers and payments through platforms.
Money out. Every business cost: materials, tools, insurance, fuel, phone, software, parking.
Mileage and travel. Date, start and end point, purpose and distance for business journeys.
Paperwork. Quotes, invoices, receipts, insurance documents, certificates and key messages agreeing the scope of work.

If a number will end up on your tax return, there should be a record behind it.

Choose a system you will actually use

The best system is the one you use every week. Compare options honestly:

Option	Strengths	Weaknesses
Notebook and envelope	Cheap, no learning curve	Easy to lose, slow to total
Spreadsheet	Flexible, free, easy to total	You must remember to update it
Accounting app	Photographs receipts, tracks mileage, can estimate tax	Subscription cost, setup time
Accountant or bookkeeper	Less of your time	A fee, and you still must pass on receipts

A spreadsheet with one tab for income and one for expenses is plenty for most solo providers.

A weekly 15-minute routine

Pick a fixed slot, such as Sunday evening, and do the same steps:

Photograph or scan any receipts from the week and file them by month.
Log payments received against the jobs they relate to.
Record mileage from your diary or phone calendar.
Note any unpaid invoices and chase them.
Glance at the total: are you on track for the month?

Fifteen minutes weekly beats four hours annually.

Receipts: what to capture

For each purchase, a good record shows what was bought, from whom, the date and the amount. If an item is part personal and part business, note the business proportion and why. Paper receipts fade, so photograph them the same day.

Keep business-only transactions separate where possible. A dedicated account makes this much easier; see separating business and personal finances.

Mileage and travel records

Most self-employed providers drive. A running log with date, journey purpose, start, end and miles is the standard. Phone apps can automate this, or you can keep a small notebook in the vehicle. Commuting between home and a fixed workplace is treated differently from business journeys, so check the guidance on gov.uk and see our overview of the expenses you can usually claim.

How long to keep records

You are generally required to keep records for a number of years after the relevant tax deadline. The exact period is set by HMRC and can differ depending on your circumstances, so check the current rule on gov.uk, then keep to it. Digital copies are normally acceptable if they are legible and you can produce them.

Records for customers and disputes

Not every record is for the taxman. Customer-facing records protect you too:

The original request and the offer you sent
Any agreed changes to scope or price, in writing
Photos of the property before and after
Any issues reported on the day

If you work through Compito, messages and offers sit in the conversation with the customer, but it is still wise to keep your own notes and photos. These help you avoid payment disputes and resolve complaints calmly.

Data you hold about customers

Names, addresses and phone numbers are personal data. Store them securely, keep them only as long as you need them, and do not share them casually. Our guide to GDPR basics for handling customer details explains the essentials.

Common mistakes

Treating cash differently from card payments. All income counts.
Throwing away receipts "because it was only a few pounds". Small costs add up.
Recording only profit, not income and costs separately.
Waiting for the year end to reconstruct figures from memory.

Frequently asked questions

Do I need accounting software?

No. A spreadsheet or even a notebook is acceptable if it is accurate and complete. Software helps if you have many transactions or want automatic mileage and receipt capture.

Can I keep digital copies instead of paper receipts?

Generally yes, provided the copy is clear and complete and you can produce it when asked. Check the current guidance on gov.uk for any conditions.

What if I lose a receipt?

Reconstruct the record as best you can from bank statements and supplier accounts, and note that the receipt is missing. Going forward, photograph receipts on the same day.

Become a Compito provider

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