UPDATED 3 February 2017
Did
you miss Bonfire Day? And I mean Day, not Night. Not 5th November but 1st February. It is the day when eleven million people who do self-assessment can
celebrate getting their form in by the 31 January deadline. Because the day
after that they can burn some of their older financial records.
If you are in business, self-employed or you rent out property, then you must
keep records for five years after your self-assessment form was due in. The return for 20010/11 was due in on 31 January 2012 and five years from then
was 31 January 2017. So the next day you could destroy all records which
relate to the tax year 2010/11.
If your annual accounts are made up to 5 April then you can destroy documents
dated between 6 April 2010 and 5 April 2011. But if your accounting year begins
on 1 May, as many do, then you must keep almost another year’s documents. So on 1 February 2017 you could destroy records dated 1 May 2009 to 30 April 2010. The rule is that you must keep financial records used in a tax return which are all those for your accounting year which ends in that tax year. That accounting year ends in the financial year 2010/11 so can be destroyed on 1 February 2017. See Keeping your selfemployment records
If you are VAT registered then you must keep documents for six years
after the most recent item mentioned on them. So on 1 February 2017 that would be
those dated up to 31 January 2011. So some documents may have to be kept a little longer than 1 February, depending when your year end is. There is a different VAT rule if you sell
digital goods to other EU countries - the VAT MOSS scheme. Then you must keep records of those sales
until 31 December after their tenth anniversary. So sales in February 2017 need to be kept until 31 December 2027. See VAT record keeping
If you do self-assessment but are not in business then you have to keep records for one year not five so on 1 February 2017 you
can destroy records for the 2014/15 tax year – 6 April 2014 to 5 April 2015.
However, it is cautious to keep records for a bit longer. Overpaid tax claims
can go back four previous tax years. So wait until 6 April 2017 to have another bonfire and burn the records
from 2012/13 as it will then be too late to make a claim for that year. The ultra-cautious may note that some legal claims can go back up to six calendar years and mis-selling claims such as PPI have gone back much further.
See Keeping your tax records
NB If your tax return was sent in late – after 31 January – then you should
keep records for fifteen months after it was sent and if there is a live tax
enquiry into your affairs you must retain records that relate to the year of
the enquiry until it is settled.
If you do not fill in a self-assessment form you do not have to keep records
for any particular time. Four previous tax years or even longer is cautious - see above.
Of course never destroy documents about loans, mortgages, investments, insurance, or other financial
contracts that are current. If you had work done on your home it is safest to keep receipts and guarantees until you sell it.
If you do the probate on someone's estate you should keep the probate records for 20 years.
And a cross-cut shredder might be safer and more secure than a bonfire.
Version 3.1
3 February 2017
