If you must submit a Self Assessment tax return to HM Revenue and Customs (HMRC), you must preserve records.To correctly fill out your tax return, you’ll need your records. HMRC may request the documents if they check your tax return. You must keep track, so we took a look at maintaining your self employed pay and tax records.
Maintaining Your Self Employed Pay And Tax Records – How To Keep Records
There are no requirements for the format of your records. You can store them in a software application, digitally, or on paper (like book-keeping software).
If your records are not accurate, full, and readable, HMRC may impose a penalty.
Lost/Destroyed Records
Request copies of as many documents as you can, such as duplicate invoices from vendors or bank statements from banks.
If you are unable to rebuild all of your records, you can use “provisional” or “estimated” figures instead. On your tax return, you must explain this in the “Any other information” section.
‘Provisional’ indicates you can subsequently obtain documentation to confirm your figures. You won’t be able to confirm the figures because they are “estimated.”
If your calculations prove to be incorrect and you have not paid enough tax, you may be required to pay interest and penalties.
Maintaining Your Self Employed Pay And Tax Records – How Long To Keep Records
Whether you file your taxes before or after the deadline will determine how long you need to maintain your documents.
HMRC may examine your records to ensure that you are paying the appropriate amount of tax.
After the tax year for which the tax return is filed has ended, you should maintain your records for at least 22 months.
Keep your data until at least the end of January 2024, for instance, if you electronically submit your 2021 to 2022 tax return by January 31, 2023.
Tax returns that were submitted after the due date shall be kept on file for at least 15 months.
Employees & Directors
You should preserve records related to your salary and taxes, such as:
If you quit your job, your P45 will show your salary and taxes paid up to that point. If you start a new job on April 5th, your P60 will show your pay and taxes paid throughout the tax year. P11D: This lists your expenses and benefits, such as a company car or health insurance certificates, together with details on any redundancy or termination payments.
If you do not have your P60, P45, or form P11D, get in touch with your company.
Additionally, you want to retain records of any additional earnings or employment benefits.
Expense & Benefit Records
You might be able to claim expenses for items like work-related tools, travel expenses, and specialised apparel in order to lower the amount of tax you’ll have to pay. To include them in your tax return, you must keep a record of these.
Additionally, keep any records pertaining to:
Social Security advantages
Lawful Sick Pay
Jobseeker’s Allowance Statutory Maternity, Paternity, or Adoption Pay
