One of our larger clients has asked if they can now destroy their invoices, receipts etc from the 2003/04 and 2004/05 tax year which is taking up space within their office. I was wondering if still commonplace to work on the six years rule regarding retention of paperwork for tax/vat inspection. With the constant threat of HMRC inspections looming I dont want to tell the client it is okay to destroy these records and then HMRC attend his premsies and this causes problems.
Thanks
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See HMRC guidance at
http://www.hmrc.gov.uk/factsheet/record-keeping.pdf
The ordinary time limit for enquiries would be 4 years unless there was carelessness in which case it can be 6 (TMA 1970 Sections 34 and 36).
HMRC would only be able to open enquiries or raise assessments beyond 6 years if there was deliberate understatement of business profits TMA 1970 Section 36). The clients must be their own judge of whether they might need to defend any action under that heading !
Consider storing the records online.
In theory destroying older records should be fine. However, to be safe, you could suggest to your client that he scans the records and stores them online so that there is no cost to storage.
There are a number of services that enable you to do this including: Evernote, Dropbox or Receipt Bank (my company) where we have a free DIY plan if you just want to store the items.