We’ve all been there. You open the drawer, pull out the shoebox, envelope, or carrier bag filled with crumpled receipts from the past year, and feel your stress level spike. Tax season has arrived, and that pile of paper represents money you spent but might not be able to claim if you can’t make sense of it all.
Take a deep breath. You’re not alone, and this is fixable. Here’s how to tackle that receipt chaos and turn it into organised documentation your accountant can actually use.
Step 1: Set Up Your Workspace
Before you dive into the pile, create a system. You’ll need:
- A flat surface with good lighting
- Several folders, envelopes, or labelled boxes
- A calculator or spreadsheet
- A bin bag for personal receipts
- Your favourite beverage (this might take a while)
Set aside at least two to three hours of uninterrupted time. Put on some music or a podcast and commit to getting through this.
Step 2: Create Simple Categories
Don’t overthink this. Most small businesses need just a handful of categories:
- Office supplies and equipment
- Meals and subsistence (only allowable for staff, not client entertaining)
- Travel and motor expenses
- Marketing and advertising
- Professional services and subscriptions
- Utilities and rent
- Stock and materials
- Other allowable business expenses
Write these on separate folders or envelopes. You can always combine or split categories later.
Step 3: Sort First, Calculate Later
Go through your receipts one by one. Your only job right now is to decide: business or personal? If it’s business, which category does it belong to?
Bin personal receipts. Put business receipts in their appropriate category folder. Don’t stop to add things up or second-guess yourself. Just keep the momentum going.
Finding receipts you’re not sure about? Create a “maybe” pile and come back to it later or ask your accountant. Remember that HMRC requires expenses to be “wholly and exclusively” for business purposes.
Step 4: Deal With Missing or Illegible Receipts
Found a receipt that’s completely faded or unreadable? Check your bank or credit card statement for that date. If you can identify the charge, write the details on the blank receipt or create a note with the date, amount, supplier, and business purpose.
Missing receipts entirely? Your credit card and bank statements can fill in many gaps. Your accountant can help reconstruct expenses from these records, though it takes more time and HMRC prefers original receipts.
For expenses under £25, simplified records may be acceptable, but it’s always better to have proper documentation.
Step 5: Add It Up
Once everything is sorted, total each category. You can:
- Use a calculator and write the total on each folder
- Create a simple spreadsheet with dates, suppliers, and amounts
- Take photos of organised receipts and send them to your accountant with category totals
- Note which receipts include VAT if you’re VAT registered
Your accountant doesn’t need perfection. They need organised information that’s reasonably complete and accurate.
Step 6: Note Special Situations
As you sort, flag anything that needs explanation:
- Large equipment purchases (these may qualify for Annual Investment Allowance)
- Vehicle expenses (your accountant will need mileage logs too – 45p per mile for first 10,000 miles)
- Use of home as office (you may be able to claim a proportion of household bills)
- Mixed-use expenses (like a mobile phone that’s partly personal)
- Any cash payments you made
A sticky note on the folder or a quick email to your accountant works fine.
What If You’re Really Behind?
If your shoebox represents multiple years of neglect, don’t let embarrassment keep you from getting help. Accountants have seen worse, and we’d rather help you fix it than have you face penalties from HMRC for late filing.
Consider these options:
- Hire a bookkeeper to organise everything professionally
- Use your bank statements as the primary record and supplement with available receipts
- Work with your accountant to create reasonable estimates for categories where records are truly lost
- Remember that HMRC can investigate up to 4 years back (or 6 years in cases of careless errors), so getting organised now protects you
HMRC requires you to keep business records for at least 5 years after the 31st January submission deadline. Digital records are acceptable.
Preventing Next Year’s Shoebox
Once you’ve conquered this year’s chaos, set yourself up for success:
- Take photos of receipts immediately and store them in a folder on your phone
- Use accounting software like Xero, QuickBooks, or FreeAgent that lets you snap and categorise receipts on the go
- Keep a small accordion file in your car or bag to capture receipts in real time
- Review and organise monthly rather than annually
- Consider Making Tax Digital requirements if you’re VAT registered
Even an imperfect system used consistently beats a perfect system you never implement.
You’ve Got This
That shoebox might look intimidating, but it represents allowable expenses you’ve already incurred. A few hours of organising now could save you hundreds or thousands in tax. Your accountant will appreciate the effort, and you’ll feel the relief of having this task behind you.
And next year? You won’t need the shoebox at all.
Ready to hand off your organised records? Let’s work together to make sure you’re claiming everything you’re entitled to whilst staying fully compliant with HMRC requirements.
