A new HMRC factsheet
HMRC has published a factsheet called Keeping records for business – what you need to know.
HMRC explains this is the first of what will be a series of factsheets branded 'Tax Help' which aims to provide advice and information about record-keeping requirements for its business customers.
The new factsheet does give some useful information about what records businesses should keep and for how long. There is a table summarising what must be kept by law for VAT, payroll taxes and the construction industry scheme, plus a list of what sort of records would be suitable to record the results of a businesses for income tax or corporation tax purposes.
A weakness in the factsheet is that it does not say much about the records which a business person might need to keep about non-business matters, although on page 2 there is a potentially confusing reference to a 'personal (non-business) tax return' and the requirement to keep records for only 22 months. In fact of course:
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An individual who is self-employed or a partner in a partnership, or who has property income, must keep all tax return records for 5 years, 10 months (not 6 years as the factsheet says) after the relevant tax year.
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Everyone else in self assessment, including those who are directors or employees in their own companies, need only keep everything for 22 months after the end of the year.
It is a pity HMRC did not explain this or produce a non-business record-keeping factsheet at the same time. We must hope this is in the pipeline.
Note that Schedule 37, FA 2008 allows HMRC to change the time limits for record-keeping and to specify what records should be keep, but so far no regulations have been laid to change the existing rules.
On the subject of tax credits, the new factsheet says at the beginning that 'there are some special rules' for record-keeping if, among other things, you claim benefits or credits. Unhelpfully there is no further information or signposting about this. In fact the tax credits legislation does not contain any requirement about what records to keep or for how long – there are no 'special rules' – although it is always best advice for tax credit claimants to keep records about their income and personal circumstances and to keep them as long as they keep their tax records.