bank-rules

---
name: bank-rules
description: Turns twelve months of your actual bank statement into a named rule for every recurring payment, a written method for the three things a rule must never guess at (card settlements, delivery payouts and daily takings), and a close checklist with the digital record and retention duties dated against it. Use when month end takes a week, when your accountant keeps asking what a payment was, or before Making Tax Digital reaches your turnover band.
---

# Month end in an afternoon, because the bank feed already knows what everything is

You give this twelve months of bank transactions exported from the account, your card and delivery platform statements, your till summary, and a list of who you actually pay. You get back one rule per recurring counterparty matched on the text the bank really shows, a written method for the transactions a rule must never touch, a dated close checklist, and a record of which HMRC duties already apply to you and which arrive on a known date. It does not connect to your bank, post anything to your ledger, or tell you that you are compliant.

## What it does

1. **Start with one bank account for the business and nothing personal through it, because every later step depends on it.** GOV.UK is direct about limited companies: "There must be a clear division between the company's finances and those of the owners and directors. This is because the company is a separate legal entity", and "your company's banking must be separate from your personal banking." The same page states the consequence of failing to keep accounting records: "You can be fined £3,000 by HMRC or disqualified as a company director if you do not keep accounting records." A sole trader is not a separate legal entity, but the practical case is identical. A single account carrying a school trip and a fish delivery cannot be rule-driven, and every hour saved later is lost to picking them apart.

2. **List every way money actually moves in a venue before writing a single rule, because the list is longer than owners expect.** Card acquirer settlements, usually net of fees and often batched across days. Delivery platform payouts, net of commission and of refunds you did not authorise. Cash banked, in bags, on dates that do not match the takings. Supplier direct debits and variable direct debits. Weekly and fortnightly payroll. PAYE to HMRC, due "the 22nd of the next tax month if you pay monthly". VAT. Rent, rates, utilities, music licences, waste, linen, gas safety. Deposits taken for future bookings, which are not yet your income. Write the list first. A rule set built from the statement alone will silently miss the categories that only appear once a quarter.

3. **Write each rule against the exact text the bank prints, not the name you use for the supplier.** Export the descriptions and count them. The brewery may appear as three different strings after a merger. The card acquirer may append a merchant ID that changes when a terminal is replaced. Match on the stable substring, record the full example description in the rule, and record the date you last saw it. Then review the rule set every quarter for strings that stopped appearing, which is the tell that a supplier changed its payment reference and your rule quietly stopped firing while the transactions piled up uncategorised.

4. **Only let a rule post automatically where the payment is fixed, certain and single-category.** Rent, the licence fee, the alarm contract, the equipment lease: one amount, one category, one counterparty, nothing to split. Everything variable gets a rule that categorises and flags for review rather than one that posts. The two that must never auto-post in a venue are card settlements and delivery platform payouts, because both arrive net. A settlement of £4,812.60 is not £4,812.60 of sales, it is gross sales less acquirer fees, and a rule that books the net figure to sales understates both your income and your costs while leaving the VAT position wrong in a way that reconciles to nothing.

5. **Reconcile the till to the bank through daily gross takings, and record them digitally.** VAT Notice 700/22 states the rule for anyone using a retail scheme: "In addition to the records listed in paragraph 3.3, if you account for VAT using a retail scheme, you must keep a digital record of your daily gross takings (DGT). You're not required to keep a separate record of the supplies that make up your DGT within functional compatible software." That is the bridge. Daily gross takings come from the till, the settlement comes from the acquirer, the banking comes from the statement, and the reconciliation is takings to settlement to bank, with the fee as the difference. Do it daily or weekly. Done monthly it becomes an archaeology exercise, which is exactly why month end takes a week.

6. **Use the two relaxations HMRC actually gives, and not one inch more.** On supplier statements, the notice carries a rule with the force of law: "Where a supplier issues a statement for a period, you may record the totals from the supplier statement (rather than the individual invoices), as long as all supplies on the statement are included on the same return and the total VAT charged at each rate is shown." It adds that you must cross reference the statement to the invoices received, which can be done outside the digital records. On petty cash, again with the force of law: "This applies to individual purchases with a VAT-inclusive value below £50. The total value of petty cash transactions recorded in this way cannot exceed a VAT-inclusive value of £500 per entry." Write both limits into the close checklist as numbers, because a manager buying milk does not read VAT notices.

7. **Keep the chain digital from the till to the return, because a copy and paste breaks it.** The notice defines the requirement: "A digital link is where a transfer or exchange of data is made (or can be made) electronically between software programs, products or applications. A digital link does not need any manual intervention, such as the copying over of information by hand, or the manual relocation of data between 2 or more pieces of software." Linked spreadsheet cells count: "if you have a formula in one sheet that mirrors the source's value in another cell, then the cells are linked." And the prohibition is explicit: "HMRC does not consider the use of 'cut and paste' or 'copy and paste' to select and move information, as a digital link." Map your own chain on one page, box by box, and mark every join as linked or manual.

8. **Put the Making Tax Digital dates against your own turnover, because two of the three have not arrived yet.** For sole traders and landlords, qualifying income over £50,000 for the 2024 to 2025 tax year brings you in "from 6 April 2026", which is already in force. Over £30,000 for 2025 to 2026 brings you in from 6 April 2027, and over £20,000 for 2026 to 2027 from 6 April 2028. Quarterly update deadlines are 7 August, 7 November, 7 February and 7 May. Digital records must carry the amount, the "date when the income was received or expenses incurred" and the category, created "as close to the date of the transaction as possible". Below £90,000 turnover a sole trader need only record whether a transaction is income or expense, and once turnover reaches £90,000 full categorisation applies for the whole tax year.

9. **Write the close checklist and the retention rule on the same page, and date it.** The checklist is short when the rules work: reconcile each bank account to the statement, clear the review queue, reconcile card settlements to takings, reconcile the delivery platforms, check deposits held are still sitting as liabilities, post payroll, check the VAT control account. Retention sits underneath: for a sole trader or partner, "You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year"; for a company, "You must keep records for 6 years from the end of the last company financial year they relate to", longer where a transaction spans periods. The company list names the venue's own documents: "invoices, contracts, sales books and till rolls", "the stocktakings you used to work out the stock figure", and "bank statements and correspondence".

## Then it checks

1. Every recurring counterparty in twelve months of statement lines has either a rule or a line in the gaps list saying why it has none, and no transaction type from the step 2 list is absent from the rule set without a reason.
2. Every rule records the exact bank description string it matches, a full example transaction, and the date that string was last seen in the statement.
3. No rule posts automatically unless the payment is fixed in amount, single in category and single in counterparty, and no card settlement or delivery platform payout posts automatically at all.
4. The takings to settlement to bank reconciliation is written out for at least one real day with real figures, and the fee is shown as the difference rather than assumed.
5. The petty cash limits appear as the figures £50 per purchase and £500 per entry, and the supplier statement relaxation records the cross reference step, with both quoted to VAT Notice 700/22.
6. The digital chain is drawn from till to return with every join marked linked or manual, and every manual join is listed as a gap rather than described as acceptable.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is. A note to the accountant written as though the owner wrote it goes to the owner first.
- Never connect to a bank, an accounting package or a card platform, never post a transaction, and never change a ledger. This produces rules, a method and a checklist for the owner or their bookkeeper to apply.
- Must refuse to write a rule that assigns a category to an unidentified payment, however small and however regular. An unidentified payment goes to a review queue with its date and amount. A rule that guesses is worse than no rule, because it produces a tidy set of books that is wrong.
- Never treat a net receipt as income. Card settlements, delivery payouts and any receipt arriving after a deduction are split into gross and fee, or they go to the review queue.
- Never tell an owner they are compliant with Making Tax Digital, that their records satisfy HMRC, or that a digital link is adequate. Those are conclusions for their accountant, and an owner told they are fine stops asking.
- Never state a typical cost of sales percentage, a typical wage percentage or any benchmark for a single venue. No published figure exists for one independent business, and a rule set built to hit a borrowed ratio hides the thing it was meant to reveal.
- This output is a working document prepared for the owner's accountant or bookkeeper to check before it is relied on. It records published HMRC requirements, the owner's own transactions and the gaps between them. It is not tax advice and it does not certify that any record keeping duty has been met.

## Built from
- GOV.UK, "Running a limited company: your responsibilities", the "Company and accounting records" page, https://www.gov.uk/running-a-limited-company/company-and-accounting-records, no publication date shown on the page, read 16 September 2026: the separate banking requirement and the £3,000 fine in step 1, and the record list and six year retention in step 9.
- GOV.UK, "Business records if you're self-employed", the "How long to keep your records" page, https://www.gov.uk/self-employed-records/how-long-to-keep-your-records, no publication date shown on the page, read 16 September 2026: the five years after the 31 January deadline rule in step 9, and the fifteen months rule for a return sent more than four years late.
- HMRC, "VAT Notice 700/22: Making Tax Digital for VAT", https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat, updated 1 April 2022, read 16 September 2026: daily gross takings at paragraph 3.5 in step 5, the supplier statement and petty cash rules with the force of law at 3.3.3.1 and 3.3.3.2 in step 6, and the digital link definition and the cut and paste prohibition at 3.2.1 in step 7.
- GOV.UK, "Check if you're eligible for Making Tax Digital for Income Tax", https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax, last updated 26 March 2026, read 16 September 2026: the £50,000, £30,000 and £20,000 thresholds and their 6 April 2026, 2027 and 2028 start dates in step 8.
- GOV.UK, "Use Making Tax Digital for Income Tax", the "Keep digital records" and "Send quarterly updates" pages, https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/keep-digital-records and /send-quarterly-updates, guide published 22 April 2024 and last updated 7 September 2026, read 16 September 2026: what each digital record must carry, the create it close to the transaction rule, the £90,000 categorisation point, and the 7 August, 7 November, 7 February and 7 May deadlines, all in step 8.
- GOV.UK, "Pay employers' PAYE", https://www.gov.uk/pay-paye-tax, no publication date shown on the page, read 16 September 2026: the 22nd of the next tax month deadline named in step 2.

# bank-rules

## You are given
A folder for one UK hospitality business. It contains: a CSV export of twelve months of business bank transactions with, at minimum, date, full bank description string, amount in pounds, and direction of travel. Card acquirer settlement statements for the same period showing gross sales, fees deducted and net amount paid. Delivery platform payout statements showing gross orders, commission, refunds and net payout. A till summary giving daily gross takings by date. A list of who the business actually pays, each with the name the owner uses, the legal name where known, what the payment is for, how often it arrives and whether the amount is fixed or variable. The business's legal form, its turnover for the last full year, and whether it is VAT registered and on which scheme. And, already decided by Claude and supplied as text: which counterparties get a rule, the category each rule assigns, whether each rule may post automatically or must flag for review, the exact match string for each rule, and the close checklist in the order the owner will work it.

## Produce
Write into a `./bank-rules-output/` folder:

1. `transaction-census.csv` with these columns in this order: `description_string_verbatim`, `occurrences_12m`, `first_seen`, `last_seen`, `total_in_gbp`, `total_out_gbp`, `amount_varies`, `mapped_to_rule_ref`. One row per distinct bank description string, counted not sampled. `amount_varies` is `yes` or `no`, computed from whether every occurrence has the identical amount. `mapped_to_rule_ref` is empty where no rule covers the string.
2. `rules.csv` with columns: `rule_ref`, `counterparty_name`, `match_string_verbatim`, `example_description_verbatim`, `example_date`, `example_amount_gbp`, `category_assigned`, `posting_mode`, `amount_fixed`, `single_category`, `single_counterparty`, `auto_post_permitted`, `occurrences_matched`, `last_seen`. `rule_ref` is R001 upward. `posting_mode` is exactly `post automatically` or `categorise and flag for review`. `auto_post_permitted` is computed as `yes` only where `amount_fixed`, `single_category` and `single_counterparty` all read `yes`, and any row where `posting_mode` is `post automatically` while `auto_post_permitted` is `no` is listed in `gaps.md`.
3. `net-receipts.csv` with columns: `source`, `statement_period`, `gross_gbp`, `fees_gbp`, `refunds_gbp`, `net_paid_gbp`, `bank_credit_found`, `bank_credit_date`, `bank_credit_gbp`, `variance_gbp`. `source` is exactly one of `card acquirer`, `delivery platform`, `other net receipt`. `variance_gbp` is `net_paid_gbp` minus `bank_credit_gbp`, computed. `bank_credit_found` is `yes` or `no`.
4. `takings-reconciliation.csv` with columns: `date`, `daily_gross_takings_gbp`, `card_element_gbp`, `cash_element_gbp`, `settlement_received_gbp`, `settlement_date`, `fee_implied_gbp`, `cash_banked_gbp`, `cash_banked_date`, `unreconciled_gbp`. `fee_implied_gbp` is the card element minus the settlement received, computed. Write one row per day for which all inputs exist, and list every date missing an input in `gaps.md`.
5. `digital-chain.csv` with columns: `step_no`, `from_system`, `to_system`, `data_moved`, `join_type`, `evidence`. `join_type` is exactly one of `digital link`, `manual`, `not established`. Every row with `manual` or `not established` also appears in `gaps.md`.
6. `close-checklist.md` - the close steps exactly as supplied, numbered in the supplied order, each with a blank owner and date field, followed by a fixed reference block stating the petty cash limits as £50 per individual VAT-inclusive purchase and £500 VAT-inclusive per entry, the supplier statement relaxation with its cross reference requirement, the retention period applicable to this business's legal form, and the Making Tax Digital date that applies to this business's income band. Nothing in the supplied steps is reworded.
7. `gaps.md` - a numbered list of: every description string with no rule and more than two occurrences; every rule set to post automatically that fails the three-part test; every net receipt with no matching bank credit or a non-zero variance; every date where takings, settlement or banking is missing; every manual or unestablished join in the digital chain; every counterparty on the owner's list that never appears in the statement; every statement string that stopped appearing more than sixty days before the export end date; and any personal or non-business transaction identified in the export.

## Rules
- Codex measures, records and checks. It never invents, never rewords the owner's copy, and never makes the judgement that was supplied to it.
- Never assign a category to a transaction that no supplied rule covers. It stays uncategorised, it goes to `gaps.md`, and no default, catch-all or miscellaneous category is created.
- Never treat a net receipt as a single figure. Card settlements and delivery payouts are written into `net-receipts.csv` with gross, fees, refunds and net as separate columns, and where fees are not supplied the column is `not stated`, never zero and never derived by assumption.
- Never connect to a bank, an accounting package, a card platform or an API, and never post, import or export a transaction anywhere. Files only.
- Never write that the business is compliant with Making Tax Digital, that its records are adequate, or that a join is an acceptable digital link. Record `digital link`, `manual` or `not established` and stop there.
- Never fill a missing amount, date or fee with an assumption, an average of other rows or a zero. Missing is `not stated` and goes to `gaps.md`.
- Never write a benchmark, an industry average or a target percentage for cost of sales, wages, card fees or commission. No such published figure exists for a single independent venue and none is to be written into any file.
- Every count is counted from the export, every variance is computed from two supplied figures, and every computed column must be reproducible from the other columns in its own row.
- Every quoted HMRC requirement is copied exactly, including punctuation, and carries the notice or page it came from and the date that source was read.
- Use British English, £ and DD Month YYYY dates. No em dashes in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every file ends with this line: this is a working document prepared for the owner's accountant or bookkeeper to check before it is relied on. It records supplied transactions and published HMRC requirements and is not tax advice or a certificate that any record keeping duty has been met.

## Return
The absolute path of each file written, the row count of each CSV, the number of distinct bank description strings and how many are covered by a rule, the number of rules by posting mode and how many were set to post automatically while failing the three-part test, the total value of transactions left uncategorised, the number of net receipts checked with the largest variance and its source named, how many days reconciled fully in `takings-reconciliation.csv` and how many had a missing input, the number of joins in the digital chain by join type, the retention period and Making Tax Digital date written into the checklist, and the `gaps.md` item count.