Millions of taxpayers are free to chuck out old tax records this month.
Whether you're employed or self employed it could be time to finally bin your dusty, old paperwork, though the rules vary depending on your employment status.
- If employed. If your tax is deducted automatically by your employer, you can throw out paperwork for the 2007/08 tax year, such as pay slips. Pay-as-you-earn (PAYE) taxpayers only have to keep records for 22 months, and this month is 22 months since the end of the 2007/08 tax year.
- If self-employed. Whether wholly self-employed or if you have self-employed income (as well as employed income) you must keep your tax records for at least five years and ten months after the end of the tax year covered. That means you can bin records, such as invoices and expenses receipts, for the 2003/04 tax year this month.
- If under investigation. HM Revenue & Customs (HMRC) can order checks into an individual's or business tax records at random even if there is no suspicion of wrongdoing. If you're unlucky enough to be in that boat, don't throw out any records. Those who underpay face penalties or prosecution, yet having good records could spare you problems.
It's worth having a system to keep on top of your taxes. Ensure you keep all your records as you go along, and file them in a safe place to avoid having to hunt for them later.
Keep them for the minimum period required, and when destroying old records, shred them after double-checking their dates first.
Further reading/Key links
Tax help: 2009/10 Tax Breakdown, Taxing Times
HMRC advice: PAYE, Self Employed