There is a legal requirement to keep, and then to preserve, the records needed to make a correct and complete self assessment tax return. Although it is the taxpayer who must retain the records, it is acceptable for the agent to retain documents on their files, subject to the firm’s internal policy on document retention and data protection.

The legislation does not generally prescribe the form in which records must be kept (eg electronic records or paper copies). It allows the duty to preserve records to be discharged by preserving the records, or the information in them, in any form and by any means, subject to limited exceptions. Taxpayers within Making Tax Digital for income tax (MTD for income tax) are the exception, and they must keep their business records digitally. There is guidance in the HMRC Compliance Handbook on this matter (see below). There is also guidance on ‘Keeping your pay and tax records’ and separate guidance on ‘Business records if you’re self-employed’ on the GOV.UK website.

MTD for income tax took effect