Record Keeping is extremely important. HMRC can issue record keeping penalties, if they raise an enquiry to check your tax return and the relevant records cannot be produced. There is a legal requirement to retain records.
How long to keep records?
As a general rule, you should keep your records for a minimum of six years.
1. Employer- PAYE records- 3 years including current year.
2. Construction Industry Scheme- 3 years including current year.
3. Personal tax return (non business) tax return, 22 months from the end of the tax year to which they relate.
What records should you keep? Self Employed/Partnerships
Details of all sales and takings, including cash receipts.
Details of all purchases and expenses, including cash purchases.
VAT account, VAT sales and purchase invoices, Import and export documentation, i.e., delivery notes
Construction Industry Scheme- Contractor
Details of all payments made to all subcontractors for work done and materials subcontractors have purchased, including subcontractor invoices.
Details of all payment and deduction statements, copies of invoices issued and payment statements received.
Details of all assets, liabilities, income and expenditure, bank statements, accounts books,purchases and sales information.
Details of PAYE records. including payments made to employees, deductions from employee wages for Income Tax, National Insurance contributions , Student Loan payments, details of employee benefits and expenses, all records of statutory payments including sick pay and maternity pay.