Sole trader income and expenses tracker (Excel)

How to use it

1. 1Add every sale and every business cost as it happens: one row each, with the date and a short description.
2. 2Enter only the business part of a mixed-use cost. If a phone bill is partly personal, put in the business share.
3. 3Pick a category. Equipment and anything personal or not allowable are kept out of the expenses total.
4. 4Under cash basis, the standard method for sole traders, record money when it's received or paid, not when you invoice.
5. 5At the year end, the Summary sheet gives total income, allowable expenses and profit, with a total for each expense heading.
6. 6Keep the receipts, invoices and bank statements behind each line for at least 5 years after the 31 January deadline.

What each field means

Date

When the money came in or went out.

Income or expense

Whether the line is money in or money out.

Category

Sales, other income, one of GOV.UK's expense headings, Equipment, or Personal or not allowable.

Amount

The business amount only, after taking out private use.

Allowable expense

Filled in for costs that reduce your profit.

Equipment

Computers, tools and other items you keep. An allowable expense under cash basis; capital allowances under traditional accounting.

Not allowable

Personal spending and anything you can't claim, kept for the record only.

What counts as an allowable expense

GOV.UK lists the costs a self-employed person can claim: office costs, travel, clothing, staff, things you buy to sell on, financial costs, business premises, advertising and marketing, subscriptions and training related to your business. Those are the tracker's expense categories.

You can only claim the business part of a cost. Everyday clothing never counts, even if you only wear it for work; uniforms, protective clothing and costumes can.

Equipment, cash basis and traditional accounting

Cash basis is now the standard way for sole traders to record income and expenses: you record money when you receive it or pay it. Under cash basis, equipment you keep for the business, such as a computer or printer, is an allowable expense. Under traditional accounting you claim capital allowances on it instead, and cars always go through capital allowances.

That's why the tracker keeps equipment in its own column and shows profit with and without it. If you use traditional accounting, you'll also need records of money owed to you and by you, and stock at the year end.

The trading allowance alternative

Instead of claiming expenses, you can use the £1,000 tax-free trading allowance. You can't claim both, and you can't claim capital allowances if you use it. If your allowable expenses total less than the allowance, the allowance gives the bigger deduction.

Licence and disclaimer

Free to use, copy and adapt for your own business or personal records. Please don't resell it or republish it as your own template.

A template is a starting point, not advice for your circumstances. Check the result against the GOV.UK guidance linked below, or ask an accountant.