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When you first go self-employed, you’ll often hear that you should retain as many documents as possible to help you file an accurate Self Assessment tax return. But how far do you need to go?
Should you really be retaining every single scrap of paper related to your business, or are some tax documents more essential than others?
Well never fear; HMRC have produced a general guide to keeping records for your tax return. It’s a bit of a long read, though, so help to help you navigate it, we’ve compiled a clear and comprehensive list of the essential tax documents you should retain when you’re self-employed.
Essential Tax Documents Not Directly Related To Tax
Not every document you should retain to help you complete your Self Assessment will be directly related to your business. Some of the documents you should keep on hand include:
- A birth certificate, for any tax claims you may make related to your age.
- A marriage certificate, if you intend to claim Married Couple’s Allowance.
- A death certificate, if you are claiming Bereavement Allowance.
- Any documentation that proves a medically diagnosed disability.
- Any documentation that proves that you are a non-resident, or are ordinarily resident, such as overseas travel records.
- Any documentation that proves that another country is your permanent home, if you claim to be non-domiciled.
- EIS3 or EIS5 forms, if you subscribe to the Enterprise Investment Scheme.
- Personal pension plan certificates.
- Gift Aid payments.
While these documents may not always be necessary to complete your Self Assessment, they should always be retained in case HMRC come calling for any supporting evidence to back up your claims.
Essential Tax Documents You Should Always Have On Hand
No matter what sector you work in, if you’re self-employed, you should make sure that you always have the following essential tax documents on hand:
- All relevant sales and business receipts, proving how much you’ve earned over the course of the tax year.
- Supporting documents, such as invoices, bank statements, or paying-in slips, to verify where each income stream originated.
- A record of all business expenses and business-related purchases, alongside their associated invoices.
- A record of all asset purchases and sales related to your business.
- A record of every outgoing payments from your business bank account, whether digital or cash, for your own personal use.
- A record of any payments you’ve made to your business’ bank account from your own personal funds.
- A record of all payments made to your employees, whether they be wages, one-off payments, benefits etc.
These essential tax documents form the basis of any successful Self Assessment tax return. As part of the government’s ‘Making Tax Digital’ scheme, many of these documents – such as invoices and expense receipts – are best kept securely in any online accounting platform (like Crunch!).
For more information on Making Tax Digital, check out our dedicated webpage, or speak to one of our advisors for a free consultation.
Essential Tax Documents For Those Earning Other UK Or Foreign Income Streams
If you’re earning any money from other UK or foreign income streams alongside your self-employed venture, there are a range of documents that you may need to keep, depending on your situation:
- Any documents showing the amount of income you’ve received.
- All receipts for any relevant expenses you claim, and evidence they relate to these income streams.
- Any dividend counterfoils from overseas companies.
- All relevant bank statements or other personal financial records to evidence the amount of income of gains you’ve received.
- Any certificates that demonstrate the tax that has already been deducted in the UK, or that has been paid or withheld in a foreign country.
Essential Tax Documents If You Receive Social Security Benefits Or Pension Payments
For anyone claim Social Security benefits or a UK pension, you’ll need to hold onto:
- Any details provided to you by the Department for Work and Pensions relating to the benefit you’re claiming, such as the State Pension, Statutory Sick Pay, Maternity Pay, Adoption Pay, Paternity Pay, or Jobseeker’s Allowance.
- Your P60 Form. This is a document that any payer of your occupational pension may provide you to demonstrate the amount of money in your pension and any tax deductions.
- Any other certificate that proves the pension you receive and the relevant tax deductions.
How long should I retain these essential tax documents?
HMRC recommends keeping all essential tax documents safely stored for at least six years, just in case you’re subject to an investigation. Check out our article, ‘How long should company records be retained for?’ for more information.
How can Crunch help me?
Well, we can’t provide you with all of these documents, but once you’ve found them, we can certainly help you store them!
Crunch is an online accounting platform, dedicated to helping the self-employed community make sense of their business finances and keep on top of their tax returns. We’re Making Tax Digital certified, which means HMRC recognises us as one of the best ways to store your digital tax documents.
All you need to do is choose a Crunch accountancy package, and you can start uploading digital backups of all your invoices, receipts, bank statements and more to our secure online platform. It doesn’t matter whether you’re on our free package or one of our paid tiers – you get access to the same online accounting platform, no matter which package you choose!
If you do decide to take up a paid package, you’ll also gain access to our in-house accounting experts. They can help you manage your books, keep you up to date on upcoming tax deadlines, and even complete and file your Self Assessment tax return on your behalf.
All you need to do is keep a record of your incomings and outgoings, and our experts take care of the rest!
For more information about Crunch’s accountancy packages, check out our Pricing page, or give one of our friendly Sales team a call for a free consultation.
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