Reminder to clients to collect records from our office.

19th May 2020

Nigel Holland

” It is important that our clients collect their records from our office after they have been worked on. They must be stored by the tax payer in case of an HMRC investigation.”

Nigel Holland

If records are not collected we shall hold onto them for a short time but if they are still not collected they will be destroyed.

Below is a copy of HMRC guidelines and Companies House advice.

Record Keeping: How long must records be retained for: Corporation tax

Companies and unincorporated associations that may be required to make a company tax return must retain their records and supporting documents, see CH11200, until the latest of

  1. the sixth anniversary of the end of the accounting period. For example the records for the accounting period ended 31 March 2010 must be kept until 31 March 2016
  2. the completion of an enquiry into the matters to which the records relate. For example, if in the case above your enquiry into the return was completed on 14 October 2017 the records must be kept until at least that date, and
  3. the day on which the enquiry window for the return closes. The date the enquiry window closes depends upon the accounting period and whether or not the company is a singleton company or a member of a small group. You will find full details in the COTAX Manual, see last date for enquiry at COM71010.

Exceptionally, we may give a company a notice to make a return for an accounting period after the date in 1 above has passed. The company must keep any records that it still has at that time until the later of the dates in 2 or 3 above.

A VAT registered company may be allowed to keep certain records for VAT purposes for a shorter period than those described above. CH15000 onwards describes how long VAT records should be retained for.

If the records relate to the acquisition or improvement of a capital asset, see CH14650.

We can charge a penalty if the company fails to keep or retain records, see EM4650.

Companies Act 2006

Section 388 Companies Act 2006 contains its own period for which a company’s accounting records, see CH11400, must be retained. A public limited company (plc) must retain its accounting records for 6 years from the date they are made, whilst a private company (not a plc) must retain its accounting records for 3 years from the date they are made. For a private limited company, tax law requires records to be kept for a longer period so the only records they can destroy at the 3 year point are ones that it does not need for the purposes of completing a company tax return.

FA98/SCH18/PARA21

Companies Act 2006/S388

How long to keep your records

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. HM Revenue and Customs (HMRC) may check your records to make sure you’re paying the right amount of tax.

ExampleIf you sent your 2018 to 2019 tax return online by 31 January 2020, you must keep your records until at least the end of January 2025.

Very late returns

If you send your tax return more than 4 years after the deadline, you’ll need to keep your records for 15 months after you send your tax return.

If your records are lost, stolen or destroyed

If you cannot replace your records, you must do your best to provide figures. Tell HMRC when you file your tax return if you’re using:

  • estimated figures – your best guess when you cannot provide the actual figures
  • provisional figures – your temporary estimated figures while you wait for actual figures (you’ll also need to submit actual figures when available)

Below are the statutory time limits set by HM Revenue and Customs for accounting, PAYE and tax return records, with lists of the documents that should be kept.

For accounting records:

VAT registered businesses must keep VAT records for at least 6 years.

Records can be kept on paper, electronically or as part of a software programme.

Records include:

  • invoices
  • self-billing invoices
  • bank statements
  • cash books
  • cheque stubs
  • paying-in slips
  • till rolls etc

For PAYE records:

Records must be kept for 3 years after the end of the tax year.

Records include:

  • what you pay to employees and deductions made
  • payments to HMRC
  • employee leave and sickness absences
  • tax code notices
  • benefits etc

For Tax Return information:

Records must be kept for at least 22 months AFTER the end of the tax year that the tax return is for (assuming the return was filed before the 31 January deadline).

For example, if your 2016/17 tax return was filed before 31 January 2018, then you need to keep your records until at least 31 January 2019.

If your tax return was filed late you need to keep your records for 15 months after the filing date.

Records include:

  • P45
  • P60
  • P11D
  • record of expenses paid
  • state benefits received
  • bank statements
  • statements of interest and tax deduction certificates
  • dividend vouchers
  • details of rental income and expenses etc.