IT Contractor Tax - Accountants for Contractors

HMRC has released a new guide explaining which tax and accounting records contractors and other businesses should keep, and how long they should keep them for.

The PDF guide - 'Keeping tax records for your business' - explains that, as a general rule, you should keep all your tax records for at least 6 years.

In addition, if you are an employer, you need to keep all PAYE records for 3 years (in addition to the current year). A CIS contractor must keep his CIS records for the same period of time.

For personal (self assessment) tax returns, you must keep all records for 22 months from the end of the tax year to which they relate.

Limited Company Contractors

If you run your own limited company, you are required to keep the following records:

1. Accounting records, so show the financial position of your company at any given time, and to comply with the Companies Act - this includes details of all assets, liabilities, income and expenditure.

2. Business records, needed to file accurate Company Tax Returns - this includes bank statements, paying-in books, purchases, expenses and sales details.

3. VAT records, needed to accurately file your quarterly VAT Returns - this includes VAT sales and purchase invoices, and any other details relating to your VAT account.

You can look up further details on record keeping, and specific requirements for employers here (PDF).