Posted April 25, 2016
Last week I was asked twice about keeping records – which made me think perhaps it should be the next topic for my blog. So what records do individuals and businesses need to keep, and for how long?
HMRC require all businesses (whether sole traders, partnerships or limited companies) to keep and retain “adequate business and accounting records” – but what does this actually mean?
You need to keep as an absolute minimum:
- Contracts and agreements
- Sales invoices
- Purchase invoices and receipts
- Bank statements and cheque book stubs
- Credit card statements
- Paypal statements
You need to keep them for at least 5 years after the 31 January submission deadline of the relevant tax year.
You don’t necessarily need to keep paper copies of receipts, they can be scanned and stored electronically if you prefer, although there are a few documents where you do need to keep originals (P60s, statutory books etc).
What if you are VAT registered?
If you are VAT registered, you need to keep VAT records for at least 6 years (10 years if you use the VAT MOSS scheme). The list of VAT records includes the above, but you also need to keep:
- self-billing agreements – this is where the customer prepares the invoice
- name, address and VAT number of any self-billing suppliers
- debit or credit notes
- import and export records
- records of items you can’t reclaim VAT on – eg business entertainment
- records of any goods you give away or take from stock for your private use
- records of all the zero-rated, reduced or VAT exempt items you buy or sell
- a VAT account
The information contained above is provided for information purposes only and is not intended to amount to advice on which reliance should be placed. We therefore disclaim all liability and responsibility arising from any reliance placed on such information. Professional advice should be obtained before taking or refraining from taking any action as a result of the above contents.