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If you are within the self assessment system, you will need to keep records so that you can complete your tax return accurately. This will ensure that you pay the correct amount of tax each year. You should retain all your records, so that you have the information ready if you are asked questions by HMRC; failure to maintain records for an adequate period could lead to a penalty charge.

Employment income

All documents that relate to income from employment should be kept, including your form P60, which will detail the amount of pay and tax at the year end, and any P45s which have been received during the year. This form will show the pay received and tax paid at an employment till the day you left. Expenses and benefits received from your employer will need to be entered on your self assessment tax return, so your P11D form needs to be retained. Documents referring to any other income should also be kept.

Record keeping for self assessment

Expenses

If you have incurred costs that are necessary to carry out your job, you may be entitled to claim these back. Receipts and other documents that serve as evidence of expenses paid need to be kept, so that you can make a claim on your tax return.

Benefits

If you have claimed benefits such as Jobseeker’s Allowance, you will need to keep any documents that show how much you received during a year.

Retention of documents

You should keep all records for one year following the deadline of 31st January. If HMRC conducts any checks into your tax return, you should keep records until the checks are complete. If you are self-employed, you will need to keep business records for five years following the deadline of 31st January.

Self-employed

If you have a business, you should keep accurate and complete records so that you have all the relevant information to complete your self assessment tax return. There are various documents and records that need to be kept if you run your own business. Invoices, receipts, cash books, bank statements, mileage records, and more need to be retained. Records of all expenditure should be kept, along with any receipts you have. You will need documentary evidence of any expenses, tax reliefs, and allowances you wish to claim. Your records may be retained either electronically or as paper copies, as long as they are all complete and legible.

 

 

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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