Record keeping for self-assessment


T

TwistyCreek

I've read http://www.hmrc.gov.uk/pdfs/sabk4.htm and I'm a bit confused. As a
individual not running a business who has to do a self-assessment return, it
looks like I must retain my records for 22 months after the end of the tax year.

Later in that document it talks about retaining records for longer to provide
evidence to support capital gains or allowable capital losses, and notes that
companies don't have to retain evidence of capital losses beyond the normal
retention period. It says "This means that the period for retaining those
records may actually end before a capital gain arises against which you can set
off those losses. This will not affect your right to set off your losses
against future capital gains and there can be no question of any penalty
arising if you no longer have the records relating to those losses. The only
record you will need to support such a set-off will be evidence that you
notified the existence and amount of those losses to us within five years after
the 31 January following the tax year in which the loss was suffered. For
limited companies the evidence will be that you told us about the losses within
six years of the end of the accounting period."

What about individuals? Do I need to keep evidence of capital losses
indefinitely, or can I dispose of them when I can throw out my old records, 22
months after the end of the tax year?
 
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M

Martin

TwistyCreek said:
I've read http://www.hmrc.gov.uk/pdfs/sabk4.htm and I'm a bit confused.
As a
individual not running a business who has to do a self-assessment return,
it
looks like I must retain my records for 22 months after the end of the tax
year.

Later in that document it talks about retaining records for longer to
provide
evidence to support capital gains or allowable capital losses, and notes
that
companies don't have to retain evidence of capital losses beyond the
normal
retention period. It says "This means that the period for retaining those
records may actually end before a capital gain arises against which you
can set
off those losses. This will not affect your right to set off your losses
against future capital gains and there can be no question of any penalty
arising if you no longer have the records relating to those losses. The
only
record you will need to support such a set-off will be evidence that you
notified the existence and amount of those losses to us within five years
after
the 31 January following the tax year in which the loss was suffered. For
limited companies the evidence will be that you told us about the losses
within
six years of the end of the accounting period."

What about individuals? Do I need to keep evidence of capital losses
indefinitely, or can I dispose of them when I can throw out my old
records, 22
months after the end of the tax year?
In order to carry fwd Cap Losses, you need to notify HRMC within the
defined time period (as above). HMRC will then send you written agreement
to the c/fwd, including the figures, or challenge it, if they choose to. So
thereafter, all you need to keep is that written agreement letter.
 
T

TwistyCreek

Martin said:
In order to carry fwd Cap Losses, you need to notify HRMC within the
defined time period (as above). HMRC will then send you written agreement
to the c/fwd, including the figures, or challenge it, if they choose to. So
thereafter, all you need to keep is that written agreement letter.
Do they only do that for losses above a certain amount? I've put relatively
small losses on my return to be carried forward in previous years and never got
a letter from them about it.
 
D

DoobieDo

Do they only do that for losses above a certain amount? I've put relatively
small losses on my return to be carried forward in previous years and never got
a letter from them about it.
Have you tried ringing your tax office? After all, if they tell you something
and you ask them to note that information on your file, then they've absolutely
no argument with you afterwards.

If you get advice here, even if it is correct, there's no guarantee that your
office will follow suit.

Get it noted officially.
 
M

Martin

TwistyCreek said:
Do they only do that for losses above a certain amount? I've put
relatively
small losses on my return to be carried forward in previous years and
never got
a letter from them about it.
Sorry - I assumed you were looking at losses from earlier years. If you
report them correctly in your Tax Return, then that is the formal
notification and request for carry-forward. You wouldn't get a formal
response from HMRC in this case, so once the enquiry window is closed,
that's it - but keep a copy of your return (although you could always get a
copy back from HMRC)
 
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T

TwistyCreek

Martin said:
Sorry - I assumed you were looking at losses from earlier years. If you
report them correctly in your Tax Return, then that is the formal
notification and request for carry-forward. You wouldn't get a formal
response from HMRC in this case, so once the enquiry window is closed,
that's it - but keep a copy of your return (although you could always get a
copy back from HMRC)
Thanks for the information Martin. In that case, it sounds like I'm doing
everything right (for once).

Doobie, thanks for the suggestion to phone the Tax Office. I'll give them a
call before I throw away any old records.
 
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