GMS Business Accountants

Which would you rather know?

In September:
“You'll need £7,500 for your Self Assessment payment in January.”

Or:

On 25 January:
“You'll need £7,500 next week.”

Same tax bill.

Very different situation.

This is one of the biggest benefits of completing Self Assessment early.

It isn't necessarily about paying HMRC early.

It's about knowing what you owe.

Once you know the figure, you can:

• check what money is already saved;
• calculate what needs to be put aside each month;
• understand any Payments on Account;
• identify missing information;
• plan your personal and business cash flow.

The 2025/26 tax year finished months ago.

If your records are complete, there is often very little reason to leave the tax return until January 2027.

Self Assessment becomes much easier to manage when it is planned rather than treated as an emergency deadline.

https://gms-accountants.co.uk/blog/complete-your-self-assessment/

The Self Assessment deadline might be 31 January 2027, but that doesn't mean January is the best time to complete your return.

September is actually a very good time.

Why?

Because completing your tax return early gives you information.

If you discover in September that your January tax payment will be £5,000, £8,000 or £10,000, you have several months to prepare.

Finding out the same figure in the final week of January doesn't change the tax liability.

It just gives you much less time to find the money.

And an important point:

Submitting your Self Assessment early does not normally mean you have to pay the tax immediately.

You can calculate the liability now while retaining the normal payment deadline.

Early preparation can also identify missing records, unexpected Payments on Account and changes in your income that might affect your tax planning.

There is very little benefit in deliberately waiting until January.

Know the number early and give yourself time to plan.

https://gms-accountants.co.uk/blog/complete-your-self-assessment/

Not in Making Tax Digital for Income Tax yet?

That doesn't necessarily mean you can ignore it.

MTD started becoming mandatory from April 2026 for the first group of sole traders and landlords.

From April 2027, the qualifying income threshold reduces to £30,000, bringing many more taxpayers into the system.

If that is likely to include you, my advice is simple:

Don't wait until April to think about it.

Consider now:

• What bookkeeping software are you using?
• Are your records already digital?
• How regularly do you update them?
• Are business and personal transactions properly separated?
• Do you normally give everything to your accountant once a year?

Someone who already maintains good digital records should find the transition considerably easier than someone starting from a carrier bag of receipts and 12 months of bank statements.

MTD is fundamentally changing Self Assessment from an annual exercise into a year-round record-keeping process.

Preparing early should make that transition much easier.

https://gms-accountants.co.uk/blog/making-tax-digital-what-happens-next/

MTD quarterly updates are not the same thing as completing your year-end tax return.

This is an important distinction.

Under Making Tax Digital for Income Tax, qualifying sole traders and landlords have to keep digital records and provide HMRC with quarterly summaries of income and expenses.

But those quarterly figures are not necessarily your final taxable profit.

There can still be adjustments at the end of the year.

Your accountant may need to consider things such as capital allowances, private use of expenses and other tax adjustments before establishing the final tax position.

So don't look at an MTD quarterly submission and automatically assume:

“That's my tax bill sorted.”

It isn't quite that simple.

However, keeping the records up to date does give you much better information during the year.

And that should mean fewer surprises when the final accounts and tax return are prepared.

MTD creates more reporting deadlines, but used properly it can also create better financial information.

https://gms-accountants.co.uk/blog/making-tax-digital-what-happens-next/

Making Tax Digital for Income Tax is now underway for the first group of sole traders and landlords.

If you were required to join from April 2026, the first quarterly update should now be behind you.

The important question is: how easy was it?

If you had to spend days finding receipts, checking bank transactions and catching up three months of bookkeeping before the deadline, it is worth changing the process now.

The next standard quarterly deadline is 7 November 2026.

Rather than waiting until November, try keeping the bookkeeping up to date monthly.

MTD isn't simply about sending HMRC four updates each year. The bigger change is moving away from doing everything once a year towards maintaining digital accounting records throughout the year.

Done properly, that also gives you better information about your business.

You can see how profitable you are, what you're spending and start estimating future tax liabilities much earlier.

The first quarter was the learning experience.

The aim should be to make the second one easier.

https://gms-accountants.co.uk/blog/making-tax-digital-what-happens-next/

Better Receipt Records Mean Better Accounts

Receipts are not just paperwork. They support the accuracy of the accounts and help show that business expenses and VAT claims are reasonable.

Good records should demonstrate:

• what was purchased;
• who supplied it;
• when it was purchased;
• how much was paid;
• why it was needed by the business;
• whether VAT was charged;
• whether there was any personal use.

Businesses can reduce missing receipt problems by using a dedicated business bank account and avoiding paying business costs personally where possible.

Receipts should be uploaded as soon as the purchase is made and attached to the relevant transaction in the bookkeeping software.

Digital copies are usually better than relying on paper documents. Paper receipts can fade, become damaged or disappear, while digital records are easier to search and retrieve.

It is also worth reviewing incomplete transactions regularly rather than waiting until the VAT return or year-end accounts are due.

Missing receipts do not always mean the cost must be excluded. A genuine business expense may still be claimed where there is other reliable evidence.

However, VAT should normally not be reclaimed without a valid VAT invoice or VAT receipt.

The simple approach is:

Clear business purpose + supporting evidence = the cost may be allowable.

No valid VAT evidence = VAT should usually be treated as £0.

Good bookkeeping reduces uncertainty, improves financial information and makes any future HMRC review easier to manage.

https://gms-accountants.co.uk/blog/missing-receipts/

What Should You Do When a Receipt Is Missing?

Before writing off a missing receipt as permanently lost, work through a few simple checks.

Start by searching your email inbox. Many suppliers now issue receipts and invoices by email, particularly for software, subscriptions, travel and online purchases.

Next, log in to the supplier’s website or customer portal. Copies of invoices can often be downloaded from the order history or billing section.

Check the bookkeeping software. The receipt may already have been uploaded but attached to the wrong transaction.

Ask the supplier for a duplicate invoice. Most established suppliers can provide replacement documents, even where the purchase was made several months ago.

Review the bank or credit card statement and add a note explaining:

• what was purchased;
• why it was needed for the business;
• who used it;
• whether there was any personal use.

Where the business purpose is clear, the expense may still be recorded even if the original receipt cannot be found.

However, VAT should normally not be reclaimed without a valid VAT invoice or receipt.

It is also important to look at the wider pattern. One genuinely lost receipt is different from regularly having large numbers of unsupported transactions.

Checking for missing documents each month, or before every VAT return, is much easier than trying to reconstruct the records at the end of the year.

https://gms-accountants.co.uk/blog/missing-receipts/

Where Should Business Receipts Be Recorded?

Keeping the receipt is only part of good bookkeeping. It also needs to be attached to the correct transaction.

An unpaid supplier invoice should usually be entered in the purchase invoice or bills section of the bookkeeping software.

A receipt paid immediately using the business bank account or card should normally be attached to the corresponding bank transaction.

Where a director pays personally for a company expense, the cost may need to be recorded through the director’s loan account or an expense claim.

Where a sole trader pays a business cost personally, it may be recorded as a business expense funded by capital introduced.

Large equipment purchases may need to be recorded as fixed assets rather than ordinary day-to-day expenses.

The purpose of this is to create a clear audit trail.

Someone reviewing the accounts should be able to see:

• the payment;
• the supplier;
• the receipt or invoice;
• the business reason for the purchase;
• the VAT treatment;
• the accounting category used.

Attaching receipts directly to transactions also makes it easier to answer questions at the VAT return or year-end accounts stage.

The best time to upload a receipt is when the purchase is made. Waiting until several months later increases the chance of the receipt being lost, forgotten or incorrectly recorded.

Small improvements in record keeping can save a significant amount of time later.

https://gms-accountants.co.uk/blog/missing-receipts/

No VAT Receipt — Should VAT Be Claimed?

A common bookkeeping question is whether VAT can be reclaimed when the receipt or invoice is missing.

The safest answer is usually no.

VAT-registered businesses are normally expected to hold a valid VAT invoice or VAT receipt to support the input VAT included on their VAT return.

For example, a business pays £120 to a supplier but cannot obtain the invoice.

The transaction may still be posted as:

Business expense: £120
VAT reclaimed: £0

The business has still recorded the cost, but it has not reclaimed VAT without suitable evidence.

A bank statement proves that money was paid, but it does not necessarily prove that VAT was charged. Supplier statements, order confirmations, delivery notes and pro-forma invoices may also be useful supporting documents, but they will not normally replace a proper VAT invoice.

HMRC may consider alternative evidence in exceptional circumstances. However, this is not something businesses should rely on as part of their normal bookkeeping process.

The first step should always be to ask the supplier for a replacement or corrected invoice.

A useful rule for routine bookkeeping is:

No valid VAT invoice = no VAT claimed.

This approach reduces the risk of HMRC disallowing the claim, asking for repayment, charging interest or considering penalties.

https://gms-accountants.co.uk/blog/missing-receipts/

Can You Claim an Expense Without a Receipt?

A missing receipt does not automatically mean that a business expense must be removed from the accounts.

The key question is whether there is enough evidence to show:

• what the payment was for;
• that it related to the business;
• who received the payment;
• when it was paid;
• whether there was any personal use.

A bank statement may show a payment to a recognised supplier, software company, insurer, fuel station or trade provider. This can help support the transaction, particularly where the supplier and business purpose are clear.

However, a bank statement does not always show exactly what was purchased. A payment to a supermarket, online marketplace or general retailer could relate to either business or personal spending.

Where a receipt is missing, businesses should add a clear description or note to the bookkeeping transaction. They should also search emails, supplier accounts and bookkeeping software before assuming the document is permanently lost.

The important distinction is between claiming the expense and reclaiming VAT.

A genuine business expense may sometimes be included without the original receipt. VAT, however, should normally not be reclaimed unless a valid VAT invoice or VAT receipt is available.

In simple terms:

A missing receipt may not prevent the expense being claimed, but it can prevent the VAT being reclaimed.

Good notes and supporting evidence can make a significant difference.

https://gms-accountants.co.uk/blog/missing-receipts/