Are you running your own business, self employed or working for a company? Either way, you will need to maintain and keep a good record of your taxes. Good book keeping also helps to portray a well organised business or individual!
Here’s all you need to know about tax record retention for:
• The self employed
You would need to keep a record of your sales and income, business expenses, earnings, pay as you earn (PAYE) and value added tax (VAT). Examples of these items include receipts, bank statements and invoices. A record of these items needs to be kept for a minimum of five years after the January submission deadline of the relevant tax year. Be sure that your figures tally or you could face a costly penalty by the authorities!
• For businesses
For businesses, it is mandatory to keep a track record of all the money spent and received, goods bought and sold with details from who you bought the goods from and who you’ve sold them off to, a list of assets and stock owned by the company as well as loans and mortgages taken by the company. Examples of items to keep include receipts, invoices, contracts, bank statements and petty cash books. Small medium enterprises (SMEs) are required to keep records for a minimum of six years from the end of the last financial year.
What are PAYE records?
As an employer, you will need to implement PAYE into your payroll system which is required by HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment.
1. PAYE records filing – for employers
Examples of records to retain for PAYE are the details of total amount paid to employees including deductions, payments made to HMRC, annual employee leaves and sick leaves, taxable expenses and benefits. Your company is required to keep these records for a minimum of three years from the end of their tax year. Should details not tally, companies could face a fine of up to £3,000!
2. PAYE records filing – for employees
Always keep a copy of your P45 and P60 records, employee benefits and one-off payments for your reference. You should keep the records for a minimum of two years after the end of each tax return’s tax year.
Now you know the basics of good tax record retention, it’s time to get documenting!
Filing all these documents can take up a lot of precious space both at home or in the office. If you would like more space to store and efficiently organise your documents and records, we are here for you.
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Here at CubeRMS, we will professionally archive your irreplaceable documents while assuring you total privacy with 24/7 access. Store without worries with us at our storage facility knowing your documents are stored safe with us all within a state of the art security system. We also offer a wide range of record management services from secure document destruction, scanning, retrieval and offsite data management.
