Keeping Personal Tax Rexords - How Long?
Discussion
I’ve always been PAYE and most years filled out a Self Assessment tax return.
I’ve always believed that I need to keep all my records for 7 years but looking at the HMRC site it seems to indicate that I only need to keep them for 15-22 months depending on when I made the return.
Correct answers on a postcard, or ideally on here, please.
Thanks!
I’ve always believed that I need to keep all my records for 7 years but looking at the HMRC site it seems to indicate that I only need to keep them for 15-22 months depending on when I made the return.
Correct answers on a postcard, or ideally on here, please.
Thanks!
garyhun said:
Yep that’s the 15-22 months I mentioned. I’m just making sure I’m not misreading because I’ve had this 7 year rule in my head for 20 odd years.
Yes I keep mine for 7 years too as that was what I was informed by HRMC back in 2003. Only noticed that on the website when you mentioned it.There are minimal legal requirements and there are wise precautions. I'd go with the six years past the official filing date (which is where the 7 years comes from). That's what I do with my client records.
If you have had self employment records to keep, the time hap can exceed 9 years - depending on the business year end date.
If you have had self employment records to keep, the time hap can exceed 9 years - depending on the business year end date.
Interesting. I, too, assumed it was seven years but following that link I see that for self-employed it's 5 years.
I don't have a problem with that as I discovered recently I had kept all my records back to 1995. Had a bit of a clear out and out of idle curiosity added up how much tax and NI I had paid over 20 years. Suffice to say I was rather shocked although the last 4 years are bringing a bit of balance!
I don't have a problem with that as I discovered recently I had kept all my records back to 1995. Had a bit of a clear out and out of idle curiosity added up how much tax and NI I had paid over 20 years. Suffice to say I was rather shocked although the last 4 years are bringing a bit of balance!
caiss4 said:
Interesting. I, too, assumed it was seven years but following that link I see that for self-employed it's 5 years.
I don't have a problem with that as I discovered recently I had kept all my records back to 1995. Had a bit of a clear out and out of idle curiosity added up how much tax and NI I had paid over 20 years. Suffice to say I was rather shocked although the last 4 years are bringing a bit of balance!
I’ve still got a photo of me holding a monster cheque for HMRC from around 2000. It never pays to look back I don't have a problem with that as I discovered recently I had kept all my records back to 1995. Had a bit of a clear out and out of idle curiosity added up how much tax and NI I had paid over 20 years. Suffice to say I was rather shocked although the last 4 years are bringing a bit of balance!
caiss4 said:
Interesting. I, too, assumed it was seven years but following that link I see that for self-employed it's 5 years.
I don't have a problem with that as I discovered recently I had kept all my records back to 1995. Had a bit of a clear out and out of idle curiosity added up how much tax and NI I had paid over 20 years. Suffice to say I was rather shocked although the last 4 years are bringing a bit of balance!
The normal record retention limit is based on the "Statute of Limitations" rule - which is six years.I don't have a problem with that as I discovered recently I had kept all my records back to 1995. Had a bit of a clear out and out of idle curiosity added up how much tax and NI I had paid over 20 years. Suffice to say I was rather shocked although the last 4 years are bringing a bit of balance!
If you are a sole trader with a year end of (say) 30 June, your tax liability for tax year 2018/19 will be the profit per your accounts for the year ended 30 June 2018.
The statutory filing date for the 2018/19 tax return is 31 January 2020.
Adding six years onto 31 January 2020 gives you 31 January 2026. This means you would need to keep your trading records starting with the first day of the accounting year 30 June 2018 (i.e. 1 July 2017) up to 31 January 2026 i.e the best part of 9 years.
Yes but surely for future capital gain/loss records, negligible value claims etc it makes sense to keep documentary evidence of of the acquisition cost of the asset in question, whenever that was? Often you can rely on broker statements to show the book cost of historic investments, but in my experience that information can disappear along the way if you switch brokers, or one broker sells its business to another.
Absolutely. If you have a capital gains tax return to make in respect of an asset you bought 20 years ago, you should have the original documentary evidence to hand showing the original purchase price of the asset from 20 years ago. You do need to apply a bit of common sense to what you decide you can throw out.
millen said:
Yes but surely for future capital gain/loss records, negligible value claims etc it makes sense to keep documentary evidence of of the acquisition cost of the asset in question, whenever that was?
Yes, although people don't have to fret about this if all their assets are in an ISA or SIPP.One of the many advantages of NOT being exclusively in BTL is the ability to use the CGT annual allowance religiously every year. £11,700 may not sound much of a tax free gain but for a couple it amounts to a thumping £234,000 tax free over a decade!
And if you hold the dreaded "accumulation units" outside a tax-exempt account, that adds a whole layer of complexity to your tax records. As well as declaring the underlying income element of each semi-annual (?) distribution you have to record the addition to your base acquisition cost. A friend of mine was tearing his hair out because his major platforms (HL, AJB etc) didn't seem to give information to streamline the process.
As I'm allergic to tedious admin work, I avoid these things like the plague!
As I'm allergic to tedious admin work, I avoid these things like the plague!
Eric and Millen,
You've both hit the spot with me! As I posted earlier, I have (nearly) all my documentation going back many years...to the 1970s! This has been helpful in the past arguing against HMRC and I've always proved to be right and they wrong.
Lately I've decided to start to dispose of a significant shareholding I have with a NYSE quoted company but before doing so I've needed to research CGT and its avoidance, meaning that I'm into s.104 holding and getting my papers and records straight, no simple task. I have the documents but no summary, at least until now after many hours of sweat and tears!. I am still short of one or two documents which begs the question: if I do not have the documentation indicating all the purchase price information and so cannot report to HMRC the actual capital gain and potential CGT, what can I do? What do HMRC require me to do in these circumstances? Any guidance will be much appreciated.
R.
You've both hit the spot with me! As I posted earlier, I have (nearly) all my documentation going back many years...to the 1970s! This has been helpful in the past arguing against HMRC and I've always proved to be right and they wrong.
Lately I've decided to start to dispose of a significant shareholding I have with a NYSE quoted company but before doing so I've needed to research CGT and its avoidance, meaning that I'm into s.104 holding and getting my papers and records straight, no simple task. I have the documents but no summary, at least until now after many hours of sweat and tears!. I am still short of one or two documents which begs the question: if I do not have the documentation indicating all the purchase price information and so cannot report to HMRC the actual capital gain and potential CGT, what can I do? What do HMRC require me to do in these circumstances? Any guidance will be much appreciated.
R.
Eric,
Unfortunately not for some of the years that I acquired the shares. It MAY be possible for me to get some information because the company's website has a facility that shows historical share prices but several splits makes matters complicated.
I would like to know what happens with HMRC if I cannot get to the cost of acquisition. How do I calculate the gain and any CGT? Something similar applies to the calculation of Estate assets, any gains, and IHT on death as well, of course.
R
Unfortunately not for some of the years that I acquired the shares. It MAY be possible for me to get some information because the company's website has a facility that shows historical share prices but several splits makes matters complicated.
I would like to know what happens with HMRC if I cannot get to the cost of acquisition. How do I calculate the gain and any CGT? Something similar applies to the calculation of Estate assets, any gains, and IHT on death as well, of course.
R
You can usually reconstruct the information by doing a bit of homework. If you cannot, you will have to estimate the cost and declare that you are using an estimated value on the tax return. That, of course, may prompt some queries from HMRC. They do have their own valuation team so they do have the resources to ascertain such things themselves - and they could arrive at a different conclusion to you.
Thanks Eric,
At present, my current thinking is to use a close approximate method to get to a section 104 position and then ensure that both the capital gain is below the CGT allowance of currently £11,700 and also the total proceeds are below 4 times the allowance, meaning that there is no requirement for me report the share sale in my self assessment. And then repeat this during each tax year thereafter.
R.
At present, my current thinking is to use a close approximate method to get to a section 104 position and then ensure that both the capital gain is below the CGT allowance of currently £11,700 and also the total proceeds are below 4 times the allowance, meaning that there is no requirement for me report the share sale in my self assessment. And then repeat this during each tax year thereafter.
R.
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