Good record keeping is vital, not just to ensure timely and accurate filing of tax returns but also in the event of any challenge by HMRC. Penalties can also be levied if your records are incomplete or inaccurate. Generally, you need to keep sufficient records to support any income or expenses included in a tax return together with any claims or elections made.
Records can be kept on paper or electronically, assuming all the necessary information is captured.
How long do records need to be kept?
Sole Traders or Partners – 5 years following the end of the tax year.
Records for the purpose of Corporation Tax – 6 years from the end of the accounting period.
Records for the purpose of VAT – at least 6 years.
Records for the purpose of PAYE – 3 years from the end of the tax year.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.