Following the 31 January 2021 deadline for submission of Self-Assessment tax returns for 2019-20, it can be a useful exercise to review the rules for keeping your pay and tax records. There are no set rules for how to keep your records, but you must usually hold them on paper, digitally or as part of a software program.
If you are keeping records used to complete a personal (non-business) Self-Assessment tax return, you must keep records for 22 months from the end of the tax year to which they relate. This means that you should keep all records for the tax year ended 5th April 2020 until at least the end of January 2022. If you file a late Self-Assessment return then you will need to keep your records for at least 15 months after the date you filed the tax return.
The types of records you should keep include those relating to:
- Income from employment e.g., P60, P45 or form P11D forms.
- Expense records if you’ve had to pay for things like tools, travel or specialist clothing for work.
- Income from employee share schemes or share-related benefits.
- Savings, investments and pensions e.g., statements of interest and income from your savings and investments.
- Pension income e.g., details of pensions (including State Pension) and any tax deductions.
- Rental income e.g., rent received and details of allowable expenses.
- Any income which is open to Capital Gains Tax.
- Foreign income.
- State benefits.
Please note, this is not a complete list and you should retain any other important records that were used in preparing your Self-Assessment return.
If you need to keep records for other reasons, there are different time limits for retaining them. For example, self-employed individuals must keep business records for at least 5 years from the 31 January submission deadline for the relevant tax year. This means that for the 2019-20 tax year where online filing was due by 31 January 2021 you must keep your records until at least the end of January 2026. There are penalties for failing to keep proper records or for keeping inaccurate records.