COVID-19 update: security of documents
In common with previous updates, we are sending this to all our clients for information. If it does not apply to your personal circumstances at the moment, please feel free to pass it on to anyone to whom you feel it would be helpful.
How long should your records be kept
During lockdown, many of us will take the opportunity to clear out our spare room, loft, garage, etc. of unwanted items. This may include old tax and business papers that we no longer need.
As a general rule, you have to keep your documents for six years after you have used them to make an entry on a tax return. This is not necessarily six years after the date of the document.
For example, I know of someone who bought a factory unit as a bare shell, fitted it out as a studio, worked in it, let it out, and finally sold it many years later – only to receive a letter from HMRC asking for all the receipts and invoices for money spent on it. Though the work was done on the premises more than six years ago, the cost of the work was claimed on the tax return of the year of sale. HMRC therefore had six years from the date that tax return went in to ask for supporting evidence.
Security – Action recommended
As I write this, business owners are making various claims for Government help, most of which are dependent on their tax references being given to HMRC.
So that criminals do not get hold of your tax references and pretend to be you, we recommend to everyone that all papers with tax references (including national insurance numbers) on should be shredded before being disposed of.
The above note is for general guidance only. Please contact us for specific advice in your circumstances before taking any action.
– By Stephen Handley, FCCA