What to keep for your tax return

By Ruth Penrose, Chartered Accountant12 October 20266 min read

Most of the stress in January comes from looking for paper, not from the tax itself. Here is what we ask every client to keep, in the order we use it, and how long to hold on to it.

Start with the money that came in

Your return begins with income, so your records should begin there too. If you are employed, your P60 shows your pay and the tax already taken for the year to 5 April. Keep it with any P45 from a job you left, and the P11D your employer sends if you had benefits such as a company car or health cover.

If you work for yourself, keep every invoice you sent and a record of every payment you received. A simple spreadsheet is fine, as long as each line matches a payment on your bank statement. We would much rather see a tidy list than a shoebox.

Then gather the smaller amounts that people forget: interest from savings, dividends from shares, rent from a lodger and income from abroad. Each one is small on its own, and each one is a common reason for a return to be queried.

Then the money that went out

Expenses lower your tax bill only if you can show them. For every cost you claim, keep the receipt or invoice and a short note of what it was for. A clear photo of a receipt is fine, as long as every figure can be read.

If you drive for work, keep a mileage log: the date, the journey, the reason and the miles. A log written at the time is worth far more than a careful guess made in January.

If you work from home

Keep a copy of your household bills, or a note of the hours you work at home each month so we can use the flat rate. We will tell you which one saves you more. You only need the evidence for one of them.

If you let a property

Keep the tenancy agreement, the letting agent's statements and the invoices for repairs. Improvements, such as a new kitchen or an extension, are treated differently from repairs, so label them clearly when you file them.

Your checklist

Check these off as they arrive, and keep them in one folder, on paper or on your computer:

P60, P45 and P11D from every employer
Invoices you sent and payments you received
Statements for every account the business uses
Receipts for every expense you claim
Your mileage log and home-working bills
Pension payments and Gift Aid donations
Last year's return and any letters from the tax office

How long to keep it

If you are self-employed or in a partnership, keep your records for at least five years after the 31 January deadline for that year's return. For the return due by 31 January 2027, that means until the end of January 2032.

If you are employed and do not run a business, the rule is shorter: 22 months after the end of the tax year. We still suggest five years for everyone. A folder costs nothing to keep, and it saves a great deal of time if a question comes later.

When the time is up, shred anything with your name, address or account numbers on it. Scanned copies can stay in a locked folder for as long as you like.