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How long do you need to keep personal tax records in the UK?

October 12, 2021by The PAYE People

The UK personal tax records you’re required to keep is dependent on your tax status. The same goes for how long you need to keep these personal tax records. Sometimes keeping your tax records is not necessary but doing it may save you when it comes to any issues in the future. With that being said, it is important to keep your personal tax records for at least the three years following the tax year they relate to.

How long should I keep my tax records?

If you are a taxpayer, you need to keep your records for at least one year and ten months (22 months total). You may need to keep them for longer depending on different circumstances, for example – if you are involved in a dispute with HMRC.

However, it’s important to note that personal records are governed by different tax laws depending upon your current status. The records you need to keep vary by whether you are:

  • married
  • single
  • a civil partner
  • a widow, widower
  • a co-habitant
  • a business owner
  • a landlord
  • a tenant
  • a trustee
  • or a beneficiary of a trust.

Generally, you will need to keep your records for six years from the end of the financial year in which they were made.

The period to keep your tax records is also affected by when you file your taxes. If you do it on time, then 22 months is all you’ll need to keep them. But if you are late at filing your taxes, you’ll need to keep your records much longer.

A person sitting at a table filling their tax papers.

If you are in a partnership or self-employed

If you’re self-employed or in a partnership, your records should be kept safe for at least five years. For example, if you file your taxes by 31st, January of 2021 for the 2019-2020 tax return, you should keep your records until 2026. This period is extended if you file your taxes late.

How should you keep your records?

How you keep your tax records entirely depends on you because there are no rules on how to do it. You can use paper, store them in software, or digitally, whichever is convenient for you. All you need to do is to ensure they are accurate and easy for you to present whenever required. With inaccurate tax records, you may end up being slammed with a penalty. And, if you keep your records on a computer, make sure both the back and front information is present. In this case, you don’t have to keep the hard copy records.

A self-employed person sorting through tax papers.

What if you lose your tax records?

What if you have lost or accidentally destroyed your tax records? It’s a good thing you are asking this question. And that’s why it’s important to have a backup for your tax records. That way, if you lose paper records, you still have digital copies of your tax records to use when needed. You can find new records on your computer, on your phone, on the internet, on an external hard drive, or on a cloud backup service and present them.

In case you’ve lost your records and have no backup, then try as much as you can to find copies. For instance, you can approach your bank and request copies of the bank statements and your suppliers for duplicate invoices.

In situations where you cannot recreate all the needed information, you are left with no option but to use “estimations” or “provisional data” when filing your records. But you’ll have to fill the “any other information” space indicating that you currently don’t have the documents to confirm these figures. If you use “provisional”, it will mean that you will get the documentation later and confirm the figures you’ve provided. If you use “estimations”, that means you won’t be able to get the documentation to confirm the figures.

Why keeping your personal tax records helps

Keeping your personal tax records is a really good way to always be prepared for the tax officials. With these records in place, they never have any need to ask for a prepayment of money you might not have. This is also a wonderful way to ensure you never have a penalty for not having your documents in order. Holding on to your personal records saves you from the possibility of being refused or delayed certain services when you need them.

Your accountant may need them to be able to rely on accurate information in order to calculate your tax bill. You may also need the documents for personal references. Whether you need your records for your own personal reasons or for tax purposes, keeping your personal tax records up to date is extremely important.

Which documents do I need to keep?

There are several documents one has to keep depending on what taxes they are involved in. You should keep the receipts you get and any other documents you’ve prepared that you’ll use to complete your self-assessment returns or rebates. Sometimes you may need documents from several years back. Here are some of the documents you will need to keep.

  • Your bank statements
  • Your credit card statements
  • Any money documents you made from a second job
  • Any money documents you made from side business
  • Your receipts and payslips from work
  • Any other relevant documents

Savings, investments and pensions

Your tax records for savings, investments and pensions will vary depending on the type of investment. Investments and pension funds will need accurate and detailed records to be kept so the auditor can verify and substantiate your tax liabilities. You should keep copies of financial transactions orderly for yourself and any future auditing.

  • Bank accounts
  • Pension annual statements
  • Investment annual statements
  • Shares annual statements
  • ISA annual statements
  • Student loan annual statements
  • Childcare annual statements
  • Savings annual statements
  • Property annual statements
  • Car annual statement

A person getting a folder to sort through their taxes.

Keeping records for student loans

Tax records are some of the most important documents you will have to keep. They are not only needed for income taxes, but for social security, pensions, and other benefits. This is why it is important to keep tax records for at least six years. Tax records are not considered legally binding without the original receipt. This is why it is always best to keep them.

What you need to do with these records is store them in an organized way. A good way to do this is to organize them according to the year. One can also go with the serial method which means organizing them by a series of numbers.

Keeping tax records for income tax

Personal taxes records in the UK also need to be kept for up to 6 years. But you can get rid of records that are less than 3 years old if they are no longer needed. HMRC will inform you if they think your records need to be kept for longer than 6 years and this is usually because there is a dispute with the tax office and they want you to keep them to make their argument stronger.

Keeping records for mortgages

If you own a property through a mortgage, you need to keep records of the tax you pay on the property. This will help you to claim back tax if you qualify. Many homeowners don’t realise that they can claim back the tax paid on the property if they overpay or qualify for rebates for some other reason. If you use an accountant or tax advisor, they can help you work through what you need to do.

The general rule of thumb regarding keeping tax records for mortgages is to do it for about three years. That gives accountants enough time to do audits and to keep them on hand in case of any disputes. Tax records for mortgages in the UK help those involved to understand your mortgage agreement.

A summary of how long do you need to keep personal tax records in the UK?

In summary, you can keep your personal tax records for as long as you need to. If you need to keep them longer because you’re under an audit, then make them available whenever they are needed. If you need them for your own financial records, then you can keep them for as long as you need to. You just need to be sure you’re not breaking any tax rules. If you are still unsure how to go about this subject, please reach out to PAYE people so we can help.

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