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I am running a small business which earns me less than the personal allowance tax threshold so I pay no tax.

I am claiming working tax credit and council tax benefit.

Obviously the less I declare as earning, the more council tax benefit I will be eligible for. But can I legitimately deduct my business expenses first before declaring my income, or do I have to declare the turnover?

I am running a small cash only Sandwich Round business that makes approx £120 per week. I am documenting all my stock outgoings on a spreadsheet and keeping all the receipts for the stock.

I am wondering though, how to legitimately document the earnings? Obviously, when I sell a sandwich or a chocolate bar I don't give a receipt for the cash sale. I normally just total up the cash at the end of the day and then write this onto my spreadsheet as cash income. But this seems very open to abuse for tax evasion because I could just make up how many I sell or don't sell!

I anticipate my earnings will be below the personal allowance threshold £7450 anyway, but I would like to know the best practice for recording the cash income without receipts if the tax man ever came knocking?

What level of detail do I need to record so that my accounts are sufficient for a self assessment tax return? Being a cash only business selling sandwiches, I don't give invoices for sandwiches sold, so how can I legitimately document my earnings to satisfy the tax man?

can anybody help me?

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http://www.adele.tv/

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