If you pay tax in the UK it is vital that you keep a record of the tax you pay. You should also keep any records relating to your income and outgoings. You will need these to complete your tax return or to answer queries from HM Revenue and Customs (HMRC) about returns you have already submitted.
Why do I need to keep records?
If you complete a Self Assessment tax return, HMRC may have queries relating to your return. They may also demand to see documents to confirm the figures you have declared.
So, you have to keep adequate tax records in order to answer these queries. If you don’t, you may have to pay a penalty.
What tax records do I need to keep?
There are various different records you should keep depending on whether you are employed, self-employed, a pensioner or a director. Common records you will have to keep include:
- Income from employment – documents including your P45, P60, form P11D and information about any redundancy payments. You should also keep details of benefits in kind, tips or gratuities and lump sum payments not included on your P45 or P60
- Records of expenses – receipts and records of any business expenses that you have paid out of your own pocket
- Pension records – documents including your form P160, P60 and details of other pensions (including the State Pension)
- Savings and investment income records – building society and bank statements and passbooks, interest statements, tax deduction certificates, dividend vouchers and unit trust tax vouchers
- Property income – records of rent received from property and the expenses you have paid
If you are self-employed you will also have to keep documents such as:
- a record of all your sales and takings
- a record of all your purchases and expenses
How long must you keep your records?
You are required to keep all your tax records for a certain period in case HMRC needs to check your tax return.
If you send in your tax return on or before 31 January you have to keep your records for a further year after this deadline. For example, for a 2010-11 tax return filed on or before 31 January 2018, you must keep your records until 31 January 2019.
If you send in your tax return after 31 January you must keep your records for 15 months after the date you sent it in. For example, for a 2010-11 tax return filed on 28 February 2018, you must keep your records until 31 May 2019.