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Your legal obligation to keep tax-related documents

In the UK, whether you are a sole trader, partnership, limited company, or PLC, you are obliged by law to keep copies or certain records. Some of those relate to your employees and your customers. This article only covers the accounts related records that you are obliged to keep – that is, the documents HMRC may ask you for to check your tax return. It refers to the records the self-employed or those running partnerships need to keep.

All of these records can be kept in the format of your choice. This means they can be in paper, digital form, or in an accounts or bookkeeping software package. To be safe, you need to keep all records that relate to your tax return for at least six years.

The main records are:

Records of takings – this means till rolls, invoices, paying-in slips, bank statements and a copy of each year’s accounts.

Record of purchases – you need the receipt for anything you have claimed as a business expense. For example, fuel and mileage forms, uniforms, stationery, raw materials, and insurance.

You also need to prove you actually paid for each of these, so you will need chequebook stubs, bank statements and credit card statements.

If you are VAT registered, you will also need the following:

VAT invoices for both sales and purchase

All import and export documentation such as delivery notes

A VAT account

You really must keep all of this. If HMRC asks for any of it, you must produce it quickly. The organisation will not accept being told that you have lost some or all of the documentation, and it is your responsibility to make sure it is legible.

Please bear in mind that, periodically, the rules surrounding the data firms have to keep are changed. Therefore, our suggestion is that you look out for these changes and that you double-check, at least once a year, your legal obligations in this area.

Posted by Mark
November 2, 2014

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