Keeping track of your tax documents might not be the most exciting task, but it’s an important one. Whether you’re an individual taxpayer or running a business, keeping tax documents organised can save you time, money, and stress if HMRC ever comes knocking. So, how long do you need to keep income tax records? Let’s get into it.

Why is it important to keep income tax records?

Keeping tax documents isn’t just about following the rules. It protects you in case of mistakes, disputes, or even potential refunds. Here’s why it matters:

  • Stay HMRC-compliant: If HMRC requests proof of your earnings or expenses, you need records to back up your tax return.
  • Claim tax relief: If you want to claim tax relief on expenses, you’ll need evidence.
  • Fix errors quickly: If HMRC makes a miscalculation or you spot a mistake, your records can help correct it.
  • Avoid penalties: Failing to keep proper records can land you in trouble, and HMRC may estimate your tax bill instead.
  • Plan your finances: Accurate records help you stay on top of your finances and prepare for future tax returns and tax rebates.

How long do you need to keep income tax records in the UK?

It depends on how you pay tax. Here’s a quick guide:

For individuals (PAYE taxpayers)

If you pay tax through PAYE, there’s no legal requirement to keep records for a set number of years. However, it’s wise to keep your P60s, P45s, and other key documents for at least 22 months after the end of the tax year – especially if you’re claiming tax relief on employment expenses.

For self-employed individuals and sole traders

If you file a Self-Assessment tax return, HMRC requires you to keep your tax records for at least 5 years after the 31st January submission deadline for that tax year. For example, if you filed a return for the 2025/26 tax year, you need to keep those records until 31st January 2031.

For limited companies

Businesses need to keep tax records for at least 6 years from the end of the accounting period they relate to. If HMRC investigates, they may ask for older records, so it’s best to stay organised.

What records should you keep?

For individuals (PAYE taxpayers):

  • P60, P45, and P11D forms
  • Payslips
  • Bank statements showing income
  • Records of tax relief claims

For self-employed individuals:

  • Income and expense records
  • Invoices and receipts
  • Bank statements
  • Business mileage logs

For businesses:

  • Sales and purchase invoices
  • Payroll records
  • VAT records (if applicable)
  • Business expenses
  • Corporation Tax returns

What happens if you don’t keep records?

Not keeping records can cause serious headaches. Here’s what could happen:

  • HMRC penalties: If you can’t provide records when asked, HMRC could fine you up to £3,000.
  • Trouble claiming tax relief: If you don’t have proof of expenses, you might lose out on tax relief.
  • Higher tax bills: HMRC could estimate your tax bill, and it might not be in your favour.
  • Delayed refunds: If you’re owed a tax rebate, missing records can slow things down.

Can you destroy old tax records?

Once the retention period is over, you can safely dispose of old tax records—but do it properly. Shred paper copies or use secure digital deletion to protect personal information. However, don’t get rid of records if you’re under investigation or involved in a tax dispute.

Tips for effective record-keeping

Staying organised can save you a lot of hassle. Here’s how:

  • Go digital: Scan receipts and keep digital copies of important documents.
  • Use tax software: HMRC-approved apps can track expenses and income.
  • Label records clearly: Organise them by tax year for easy access.
  • Back everything up: Keep a secure backup of digital files in case of data loss.

Stay on top of your tax records – and your tax rebates

Good record-keeping doesn’t just make your life easier, it can help you claim tax rebates too. If you’ve paid too much tax, having the right documents makes it easier to get your money back. Not sure if you’re due a refund? Rift can check for you. Use our free tax rebate calculator to get an estimate of how much you could be owed. Get in touch today and see if you could be owed a tax rebate.