Well-organised tax paperwork is vital for staying in control of your financial situation and helps keep accountancy fees to a minimum when submitting your tax return.
What tax records are needed for self-employment?
The tax records needed to complete your self-assessment tax return include:
• Copies of all invoices sent and received
• Bank statements
• Credit card statements
• Details regarding the sale or purchase of business assets
• VAT records, if applicable
• PAYE records if you employ staff
It is particularly important to keep records of all costs against which you might be able to claim tax relief or other allowances.
An organised system of bookkeeping will help you to stay in control at the end of your tax year, as will the right computerised accounting software.
Income from employment
HMRC requires details of any income from employment. These will include salary and any taxable benefits received as an employee through PAYE. You may need:
• Forms P45, P60 and P11D
• Information about any share options
• Details of redundancy or termination payments
• Pension income or state benefits claimed
• Income from property, investments and savings
It is advisable to keep records relating to non-taxable income, such as any large payments received, should you need to refer to them at a later date.
Records of allowable expenses also need to be retained, as does the paperwork on any sales or purchases of assets and investments. These may be needed to calculate future Capital Gains Tax liabilities.
How long do you need to keep these records?
You can work out how long you need to keep records for your business by starting at a particular year’s tax return deadline and adding a minimum of five years. The upcoming tax return deadline of 31st January 2015 relates to the tax year 2013/14, so in this case you will need to keep your business tax records until at least 31st January 2020.
In the event of a tax investigation by HMRC, you need to retain your records until you receive written confirmation that the investigation is complete.
Please feel free to contact Southside Accountants in Wimbledon & London for further information on this subject.
Leave a Reply