HMRC Guidance on Tax and Record Keeping
HMRC LINK (opens seperate tab): https://www.gov.uk/keeping-your-pay-tax-records
Records
It is a LEGAL REQUIRMENT to keep records so HMRC can see them if requested.
How long to keep records for depends in your tax status.
We recommend at least SIX YEARS, or longer.
HMRC can go back 20 years in a tax enquiry or investigation.
Bank Records are important.
HMRC can request to see all bank and credit card statements.
The onus is ALWAYS on a taxpayer to prove to HMRC their income and expenses.
HMRC don’t have to accept any explanations if they lack supporting documentation.
HMRC can decide what your taxable income and expenses are, and tax you owe, if you cannot prove it.
HMRC charge penalties for incorrect tax returns, late tax, and failure to keep sufficient records.
If you are a Landlord, or have a second home or holiday home, or might rent out your home later, Capital Gains Tax (CGT) might be applicable on its sale or gift. Keeping records indefinitely of a) purchase costs, b) improvement costs c) sale records, and d) tenant periods and information is important to be able to prove those costs and details to HMRC.
What Period Do We Need?
Personal Tax Returns
How Do Download Files?
HIGH STREET BANKS
For the high street banks, Lloyds, HSBC, Barclays, NatWest, you will normally need to login to “online banking” (as opposed to the mobile bank app) and you will find these in the statements or transactions area.
You will normally only be able to download one PDF statement at a time or download the CSV format file for a 365 day period (max). So for CSV files change the from date to 6 April and the to date to 5 April and in the download format, often a drop down box, select CSV (maybe Excel or spreadsheet) as the format option.
APP BASED BANKS
For the app based banks, e.g. Monzo, Starling, Tide, Wise obtaining statements and CSV format files can usually be done via the mobile app.
CREDIT CARDS
Most credit cards severely restrict the date range that you can recover records in either PDF or CSV format, often only to the last 6 months or less. So it is very important to keep copies as you go from month to month as otherwise you may lose access to statements in PDF or CSV form.
CSV Format
CSV is short for Comma Separated Values.
It is a digital format of file that can be opened in Microsoft Excel, Quickbooks etc.
CSV files are MUCH QUICKER to analyse then PDF format files.
That can SAVE A LOT OF TIME, and therefore keep costs down.
Most high street banks, Lloyds, HSBC, NatWest, Barclays allow a maximum of 365 days per download file. Edit the “to” and “from” dates to download more than one csv file if more than 365 days in needed.
Many of the app based banks, Monzo, Starling, Wise, Tide, etc allow a custom periods or “all time”.
Ideally, we recommend keeping bank records in CSV AND PDF format for each tax year (or accounting period).
Be careful about losing access to past records when closing a bank account.
PDF Format
PDF is short for “printer document format” and is generally a “read only” format.
It is a digital format of file that can be opened and read on many devices.
PDF is a useful way to store copies of documents on your devices and then to be able to to share them.
HOWEVER, manually going through individual PDF files is very time consuming.
PDF bank statements are a good record of the original statement.
Therefore a good idea to store and keep.
But, NOT a good way to analyse or find information.
CSV format is MUCH BETTER for that.
Ideally, we recommend keeping bank records in CSV AND PDF format for each tax year (or accounting period).
Be careful about losing access to past records when closing a bank account.
What Other Records Should I Keep?
Below is a list of some of the important documents that taxpayers should keep as well as their bank and credit card statements. The list is not exhastive but is useful as a guide to the sort of documents HMRC could ask to see, depending on your sources of income and expenses:
Bank Statements
Credit Card Statements
Loan Agreements
Loan Statements
P60 (Year End Pay and Tax certificate from employers)
P45 (Leaving Pay and Tax details from employers)
P11D (Year End Benefits in Kind and Taxable Expenses certificate from employers)
Employment Contracts (employers and employees)
Payslips (provide useful information about adjustments like pension contributions)
Invoices raised to customers or tenants
Expense receipts and bills from suppliers (with valid UK VAT number if VAT registered)
Letting Agreements (e.g. ASTs, Landlords)
Letting Agents Statements (Landlords)
Mortgage Statements (Landlords)
Dividends vouchers
Interest received certificates (tax year, from banks, building societies)
Plans and drawings (extentions and improvements to property)
Some examples of important documents to keep that HMRC might ask to see in a “Tax Enquiry”, Tax Return Check, or investigation.
Why to Keep Them?
Because it is a LEGAL REQUIRMENT.
HMRC can fine for insufficient records being kept.
Bank help with bookkeeping.
The records could also help you later.
Consider storing them in a cloud folder you can share with your bookkeeper!
e.g. Onedrive.com
Make Backups!
How & Why to Keep Them?
TIP: Avoid spreading your records over too many folders.
Put the DATE FIRST in your file name (the date of the document, not the date you save it).
Format YYYY-MM-DD consistantly.
Like, 2024-12-31-maintype–subtype-otherwords-£amount.pdf
Examples:
2024-12-31-Banking-Lloyds-11111111-Statement.pdf (or csv)
2025-01-02-Expense-Stationery-Envelopes-£11.50.pdf
SAVES A LOT OT TIME finding and sorting documents later!