How far back can the taxman enquire in uk?

Cook_County

johnllew wrote: »

I disagree. The taxman will often use the accretion of capital over the years to determine what he thinks your profits were. Keeping records for those years will enable you to explain where the money came from which may be to your advantage.

I've done nothing wrong but keep all records for 20 years just in case I have to demonstrate that.

It is also necessary to keep records of Potentially Exempt Transfers for 7 years and of unused spousal Nil Rate Bands until after the second death.

Other government agencies may also be interested if the funds came from criminal acts so it may be useful to prove the origin of the funds for other non-tax purposes.

Charis

Murdina wrote: »

The current period for retaining business records has been taken from this and tailored to fit self-assessment deadlines, and comes out near enough 6 years.)

I found out very recently at a Health & Safety workshop that businesses and charities should keep Insurance documents for Forty Years. There was a collective gasp and the organiser explained that if anyone ever comes back with an industrial injury and claims it was due to their employment with you, you had better have had insurance for that period.

Charis

Frugaldom

Further to my previous post about restarting self employment after a few years' break, I have now checked back my old records and see that I resumed trading using the exact same tax reference as before, so it looks like a continuation after a break, not a complete new start. I did speak to the tax office about it and their system shows a continuous tax record, which included a change of name (living in England at the time I had to do this by deed poll to revert to my maiden name), several address changes and a couple of different employers. For anyone who has divorced, I think it's relevant to point out that, although they do change your name on current documents after production of 'proof', the married name will stay in use until such times, if any, you remarry! I am not sure if this is only in Scottish law, where we don't have deed polls, and I did check this out with my lawyer a few years ago, and he confirmed that your married name is always legal and can only be changed by remarrying! I was furious at finding that part out, as was a friend who remarried and thought she'd be able to use her maiden name on the wedding certificate! Wouldn't that mean that the records can go back years and years in the case of a major investigation?

Hoddie_2

Don't worry about the tax reference. Once you have a UTR (unique taxpayer reference) which is the reference you're talking about, it will always belong to you and will only ever change if you file for bankruptcy or are involved in a IVA or similar. It does not necessarily mean that they believe you've been self-employed ever since you first registered.

Also, the tax office will change your name on their records to whatever you want.

Frugaldom

Thanks, Hoddie. I did wonder about that as my annual tax return has been showing my married name even though I reverted and informed them of the changes a few years ago. I'd to submit the appropriate paperwork as proof, yet still both names appear. It doesn't worry me, as such, just annoys me a bit

Murdina

can I just repeat the point I made earlier ie from records retention point of view it is on year by year basis. So if you are not self-employed in a year of assessment then that time limit does not apply FOR THAT YEAR. And whilst I agree with jimmo about how HMRC approaches enquiries going back up to 20 years, I'm also with johnllew about capital - I've acted for someone who, if they had kept at least some records, could have supported explanations about where funds came from in an enquiry better.
Personally, I've also supported an insurance claim from bank statements which were 14 years old........