Posts Tagged ‘Filing’

How long do you need to keep tax records

Thursday, November 3rd, 2016

The length of time you need to keep tax records depends on the types of income you earn and the types of tax you are paying. A list of time limits is set out below:

Income Tax and Capital Gains Tax

1.    If you are not in business
One year from the 31 January following the end of the tax year. For 2016-17, you would need to keep your records until 31 January 2019.

2.    If you are in business – which includes rental income

Five years from the 31 January following the end of the tax year. For 2016-17, you would need to keep your business and other tax records until 31 January 2023.

3.    A company subject to Corporation Tax

Six years from the end of an accounting period. For the year ending 31 December 2016 you would need to keep records until 31 December 2022.

4.    VAT

You should keep records for at least six years.

5.    PAYE

You should keep payroll records for three years after the end of a tax year. For 2016-17 this would be until 5 April 2020.


These deadlines can be extended. For example, if:

  • You file your return late.
  • A return is subject to an enquiry or compliance check.
  • Records relate to a transaction spanning more than one year.
  • An asset is bought which is expected to have a life longer beyond the time limit.

Why is 30 December an important filing date

Thursday, October 27th, 2016

If you are obliged to file a self-assessment tax return for 2015-16, and if you have underpaid tax for this year, and if some of your income (including private pension receipts) is taxed under PAYE, then you can apply to have your tax code number adjusted downwards in a future tax year to repay this underpayment by instalments. In effect, your future income tax deductions will be increased.

Many tax payers will find this a palatable option as HMRC would be collecting the underpaid tax sometime in the future. For example, if you had an underpayment for 2015-16 of £2,400 HMRC would adjust your code number for 2017-18. Consequently, instead of paying the underpayment in one amount, on or before 31 January 2017, your income tax deductions from April 2017 would be increased by £200 a month until March 2018.

There are certain conditions that must be met in order to secure this deferred repayment option. HMRC will not allow the coded out payment process if this would unduly reduce your take home pay. There are also graduated limits on the amount of tax that can be recovered in this way.

What is certain, is that you must file your 2015-16 self-assessment tax return, online, before 30 December 2016 otherwise HMRC will not accept a claim to settle income arrears using this method.

Tax payers who have not yet filed their 2015-16 returns have the best part of two months, if they anticipate tax underpaid for the year, and want to spread the repayment cash flow over the tax year 2017-18.

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