If you are one of the circa 5million people in the UK who are self-employed, you’ll know the importance of good record keeping.
It is the law that you must keep all documents for set periods of times; for invoices, bank statements and income tax records, this is six years. Petty cash records and payroll remittance advices need to be kept for at least seven years, and for receipt cash books and sales ledgers, the time period is ten years. Failure to correctly store the documents for the required time period can result in a £3,000 fine per year that you don’t have records for.
A decade is a long time though, and during this time invoices, receipts, business diaries, mileage logs and other documents can quickly build up. Rather than invest in multiple filing cabinets in your office (which may well be the spare room!), you might look into scanning your documents (as discussed in our previous blog). If you choose this option, be aware that HMRC requires hard copies for certain documents - P60 forms for example – so make sure you know what you’re doing or use a reputable scanning service. Document storage is the other option. Store as many or as few boxes as you need and build the number up over time. A records management service, like The Maltings Document Storage Solutions, will take care of recording which documents are where and, with our free retrieval and delivery service, we can source any documents you need, when you need them and deliver them to your door. So, if the tax man does come knocking, all you have to do is contact us and you’ll be sorted – no stress, no hassle.
Contact us today on 029 20 79 34 34 or firstname.lastname@example.org to find out more about how we can help you.
Do check with HMRC what your obligations are as different rules apply for sole traders, limited companies, etc.