There are a few factors that determine how long you should be keeping tax records, from your income to your employment status and the type of records you have. Let’s look at the what, when and for how long in more detail.
For individuals, it is recommended you keep your tax records for a minimum of 22 months after the end of the relevant tax year. For example, if you file your 2022/23 tax return by the filing date, you should keep your records until 2025.
However, in case you find yourself chasing a tax refund or are tackling a tax dispute, it’s a good idea to keep your records for even longer.
For businesses, it’s recommended you keep your tax records for a minimum of five years following the end of the relevant accounting period. For example, if your accounting period ends on 31 December 2022, you should keep your records until 31 December 2027.
Like individuals, in case you should be faced with a tax dispute or want to claw back some tax through a refund, keep your records for longer.
What records should you keep?
The types of records you should be keeping to support your tax return include:
● Sales and income.
● Eligible business expenses.
● If you’re registered for VAT, then your VAT records.
● If you employ people, your PAYE records.
● Details about your personal income.
● Details of any grants you’ve claimed, such as COVID-19 business grant schemes.
If you’re self-employed, as well as the above, you should also keep records like:
● Travel expenses.
● Eligible meals and entertainment expenses.
● Business equipment expenses.
● Professional fees.
● Details of any grants you’ve claimed, such as the Self-Employment Income Support Scheme.
Where should you keep your records?
Make sure you keep your records in a safe and secure place, whether that’s a safe deposit box, at home or even with your accountant in their office. (We’d advise against shoe boxes under the bed). It’s also a good idea to keep them organised to make it easy to find any evidence you may need in the future for tax purposes.
What if I lose my tax records?
If you lose your tax records, get in touch with HMRC as soon as possible. They may be able to help you reconstruct them for you.
You may also be able to get a copy of your tax records from your employer, bank or other financial institutions.
Work smarter, not harder
Keeping your tax records for the recommended length of time will help you avoid any penalties and interest if HMRC decides to audit your tax return. You can also make sure you’re claiming all the relevant tax reliefs and deductions you’re entitled to, as well as resolve any disputes if they arise.
Need somewhere safe and secure to keep your tax records? Get in touch with Norwich Accountancy today.