The Profit and Loss report for your business simply calculates the difference between your businesses Income and Outgoing transactions and shows whether it is running at a profit or loss for a specified time frame.
Unlike the Balance Sheet which provides you with a snapshot of your business at a specific point in time the Profit and Loss report provides a view for a period of time be it a month, quarter or year.
Do you need a Profit and Loss Report?
If your business is incorporated you are required by HMRC for each financial year, if your business isn’t incorporated then you do not need to provide one however it does come in handy for your Self-Assessments (as this is exactly the same information) and to allow you to gauge how your business is performing at a glance.
