Is it OK to throw out old tax info?

Seaxwyn

Hi there

I have been self-employed for years. I have a huge file of tax returns and related info, receipts for expenses, National Insurance payment details etc going back to 1997.

I know I have to keep info for seven years. Is there any advantage to keeping older stuff or can I simply bin it?

Thanks!

PlutoinCapricorn

I do as much as possible online and keep information on spreadsheets now. I play safe and keep paperwork for 6 years then scan and shred it. I have never needed to go back, but some people on MSE needed old figures.

dan.date66

to keep stuff beyond the 6 years that HMRC require. Entirely up to you if you keep it for you own sake, but no legal requirement.

martinsurrey

If you ever get caught defrauding HMRC they can investigate back 20 years.

http://www.hmrc.gov.uk/compliance/faqs.htm#7

If the worst was to happen and you got caught doing something dodgy (not that I am encouraging or accusing you, just if) the only way to prove the fraud wasn’t endemic and go back that far would be to have records that cover the 20 year period. If yu cant they could claw tax back on the presumption that you defrauded.

I wouldn’t get rid of them completely; you never know what will happen in the future.

PlutoinCapricorn

Yes, you never know.

Someone on MSE reported having to prove that they worked for a certain company many years ago; someone else needed something for insurance.

You could get a plastic envelope for each year: it depends how bulky the files would be. I am a great fan of scanning and keeping things in digital format, except that I keep the originals of important documents.

dan.date66

really only applies to income that has NEVER been declared. As the OP has been declaring his income to HMRC, he needn't worry about that. Entirely personal choice if he keeps it beyond the statutory six years.

ioscorpio

http://www.hmrc.gov.uk/factsheet/record-keeping.pdf

jimmo

When the, then, Inland Revenue had files for every taxpayer in the country important or long-life things were kept in a “Permanent Notes” folder. Tax Returns weren’t.

Routine correspondence was kept within the relevant Tax Returns so that when we reviewed your current Return we would also dispose of the 6 year old Return and its contents, taking no more than a cursory glance / flick through to check whether something important had been left in the return by mistake.

Using a property as an example evidence of the cost of purchase and improvements need to be kept until 6 years after its sale because you will need the information to deal with any capital gain arising on the sale. They should be in your equivalent of the Permanent Notes folder.

Repairs and running costs are not long life items and can safely be disposed of at the same time as you dispose of your copy of your Tax Return.

From an HMRC point of view, extending an Enquiry into one year’s Tax Return back to earlier, in date, years is pretty routine but extending back into out of date years (more than 4 years nowadays) is pretty serious. It happens, but not that often.

When it does HMRC’s standpoint will be that the business records for the one year that they have actually enquired into are a sham. If they are a sham due to your ignorance or careless behaviour they can go back 6 years. To go beyond 6 years HMRC would need to establish that you knowingly and deliberately made a false Return. That is something bordering on fraud but, legally, easier for HMRC to establish.

Whilst there will always be stories in the press and on the internet I think we all have to be practical.

Think about what needs to be in your “Permanent Notes” and ditch the dross.