How long do you keep records for a client who just has rental income plus investment income.I presume rental income is not a business? Hmrc say
You must normally keep your records for another year after the online tax return deadline of 31 January, in case HMRC decides to check your return. The same date applies even if you've sent in a paper tax return.
An example
The tax return deadline for an online 2012-13 return is 31 January 2014.
You send your tax return in before this deadline.
You need to keep your records until 31 January 2015, one year later.
If it is a business it is the usual 5 years plus 9 months?
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Replies (6)
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I am maybe too cautious, but ....
I always advise clients to keep tax records for 6 yrs from the latest filing date.
6, 8, 15 & 40
This is a question there is no right answer for as it depends on the subject of the record and your attitude to risk. Also if you trade as a limited company if the company goes, so do the records.
As ShirleyM says 6 years is an oft quoted time, because most commercial debts are time barred beyond this time. Note I said most : I understand 15 years being the limit for some legal claims of negligence where there was a period where the loss could not be known until later. Others in this board have suggested 8 years as clients don't understand the bit about 'the latest filling date'.
Insurance certificates were an odd thing & they used to say 40 years, but I understand the insurance industry now has some sort of database which all insurance companies can obtain basic information from.
On a more helpful note I have seen suggested you put retention of records in your terms & conditions, which could bring us back to six years.
One further suggestion: go paperless.
Watch out for pensions
I recently doubled the amount of the lump sum paid to a client by supplying details of salary and benefit in kind for the past fifteen years. He had higher earnings in earlier years.
Luckily I had good old fashioned paper copies of the information, The original software and backups won't work on modern machines.
The client of course never kept copies.
Besides the time limited I keep the following
Hi
I always advice my clients to keep their bank statements now for all the years which has proof of pensions payments. HMRC paperwork . Pension Paperwork and Insurance Certificates. The way some of these have behaved in the last 10 years I would not trust that have everything right. Then get rid of everything else after the time limit.
With the banks computer systems going down now on a number of occasions. A bank in Ireland once tried to tell me I did not have a bank account that my Granny had left me. I had kept the passbook for 12 years. Which was a miracle as I was given at the age of 18 there was a bit of money in it.
I was told by HMRC that I had underpaid NI but again I had all my paperwork from age 17 and was able to prove otherwise. Again the period they were referring to was 11 years ago.
They also might want the paperwork back incase in the future if any Capital Gains tax come up in the future. ( not knowing all the details)
MLR - add five years
If you cease a business relationship with a client, Money Laundering Regulations state you must keep records regarding that relationship for five further years from the date of cessation. If your records already stretch back, say, seven years for that particular client, then 7+5=12 years worth of records to be retained for that client for MLR purposes.