We are often asked how long accounting records should be kept for.   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

Capital Gains Transactions

As relief for any costs are not effectively claimed until you sell an asset, any invoices related to improvements and purchases of capital assets should be retained until a sale completes and for 22 months after the end of the tax year when the disposal is made.

For further information or clarification, please contact us.