Self assessment ― record keeping

Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Self assessment ― record keeping
  • Time limit
  • Taxpayers not carrying on a trade or business
  • Taxpayers carrying on a trade or business
  • Amended tax returns
  • Record keeping in relation to capital assets
  • In what form should the documents be retained?
  • Original documents
  • Preserving information
  • HMRC requests for documentation
  • More...

Self assessment ― record keeping

There is a legal requirement to retain records relating to the self assessment tax return. Although it is the taxpayer who must retain the records, as their agent, it is acceptable for you to retain documents on your files (subject to your internal policy on document retention and data protection).

It is not specified in the legislation in what form the records must be kept (eg electronic records or paper copies). However, there is guidance in the HMRC Compliance Manual on this matter (see below). There is also guidance on the GOV.UK website.

Digital record keeping which will be required under making tax digital (MTD) is discussed at the end of this guidance note.

Time limit

Even taking into account the time limits for keeping records discussed below, it is still a good idea to advise the taxpayer to retain documents relating to exceptional transactions for a longer period of time. If HMRC suspects that evasion has taken place, it can raise tax assessments going back as far as 20 years. As this is outside of the normal time limits, the taxpayer will find it difficult to defend themselves against such an assessment if the records outside the statutory time limit have been destroyed.

Taxpayers not carrying on a trade or business

Taxpayers who do not carry on a trade are required to retain records of income and capital gains until the later of:

  1. a)

    the first anniversary of 31 January next following the end of the tax year (ie 22 months from the end of the tax year)

  2. b)

    the date on which the enquiry window closes (which could be later if the return was submitted late, was issued after 31 October and filed after 31 January following the end of the tax year, or if the return was amended after filing, see the HMRC’s powers to open an enquiry into a return guidance note)

  3. c)

    the date on which an enquiry into the return is clo

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