Contributed by MJB Avanti
27/04/2021 - MJB Avanti
Another tax year has closed and MJB Avanti advise early submission of your records for tax return completion, but do you know which records you should be maintaining if you are self-employed? Perhaps it’s the first year you are completing a self-assessment tax return, read our handy guide to the records you should keep and how long you must keep these for.
If you are self-employed as a sole trader or as a partner in a business partnership, then you must keep suitable business records as well as separate personal records of your income.
For tax purposes, the business records must be held for at least 5 years from the 31 January submission deadline for the relevant tax year. For example, 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. In certain situations, such as when a return is submitted late, the records must be held for longer.
If you are self-employed you should also keep the following records:
You don’t need to keep the vast majority of your records in their original form. If you prefer, you can keep a copy of most of them in an alternative format, as long as they can be recovered in a readable and uncorrupted format. For example, a scanned PDF document.
If your records are no longer available for any reason, you must try and recreate them letting HMRC know if the figures are estimated or provisional. There are penalties for failing to keep proper records or for keeping inaccurate records.
Remember, early submission allows you time to financially plan for any tax liability!
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