As a first step towards paperless office management, we have scanned all the tax files of our clients. All future correspondence and workings will be in PDF and attached to existing PDF files. We are using File Center software.
However, we are not sure what we should now do with the existing paper files. Should we just discard them, especially the ones which contain mainly the correspondence and other information which we would have in Excel/word or other software? However, there are important original documents in the files- P60s, P45s, dividend vouchers, bank interest certificates, CIS vouchers, Completion Certificates, mortgage agreements, HP and asset purchase documents etc. Originals of these may be required by clients. So I guess these will need to be removed and sent back to the clients. However, due to the high no. clients and files to go through, it is going to be a time consuming and costly task.
As per HMRC guidance, records need to be kept at least for 5 years from the end of filing date. On this basis, can we destroy everything up to 05/06 tax year, including the some of the above mentioned documents? We are shortly moving to our new premises where space is premium. Therefore we need to take a decision on what to do with the old records.
Furthermore, a lot of clients are now ex-clients. Do you think it is still necessary to scan their files?
We would like to hear the experiences and suggestions from other practitioners who have undergone this before.