No challenge for the last 2 days – think we could all do with a bit of time off. But it’s back to it today and we are looking at the paper you need for tax information and when you can get rid of it. So this is an organising and decluttering challenge!
- Have a folder and subdivide
This is what I do. I have a lever arch file for my tax with dividers. The file is subdivided into categories such as Tax code, P60, P11D etc. Yours will vary depending on your tax situation. For example, if you pay tax on dividends, then you might need additional categories such as Self-assessment statements. If you have savings accounts, then you will need to keep your interest statements and so on .
- File as you go
Then I just file as I go with most recent tax code, P60 or whatever on top. In the front I keep a transparent pocket into which I put the interest statements as they arrive. I always print out any that are electronically delivered as it’s the only way I will remember them! If you do this as you go along, it makes completing the self-assessment tax form soooo much easier. For information on what records you need to keep, go the Gov UK site
- How long to keep tax records – self-assessment?
How long do you keep tax records I hear you say. The Gov.uk site has information on all types of tax records. In summary, if you fill in a self-assessment form and submit your tax return before the 31st January deadline, you have to keep the records for at least 22 months after the end of the tax year they relate to. So, if you sent in your 2015-16 tax return by 31st January 2017, you need to keep your records until January 2018 (ie add 22 months to end of March which is the end of the tax year; technically it is 4/2/18 as that tax year ended on 4/4/16 but never mind). I must admit that I do tend to keep mine a bit longer than that. But you can definitely discard them after 2 or more years.
- How long to keep records – self-employed?
If you are self-employed, you need to keep your business records for 5 years after the 31st January deadline of that tax year. So, in our example above, if you were self-employed you would need to keep your records until at least January 2022. Again, I would use a lever arch file and keep all self-employed business records together for each year, subdivided by category. If you keep filing as you go along, it really does make life easier in the long run. Pain today and jam tomorrow!
5.Shred the old stuff
Writing thi s article made me check my file and I discovered mileage records from the days when I had a company car (alas long gone), dating back to the late 1990s. I have happily shredded those and am going to check the rest of the file for dinosaur tax records that are long past their use-by date.
One more challenge tomorrow! Let me know how you have got on so far.