Having an accurate record keeping system which you keep up to date will help you pay the right amount of tax avoid paying any extra tax or penalties and keep track of your expenses
If you have to fill in and submit a tax return, the law says that you should keep all the records and documents you need to enter the right figures. If HMRC need to check your return, they may ask to see the records you used to complete it.
Record keeping penalties
If you do not keep adequate records or you do not keep your records for the required period of time, you may have to pay a penalty.
Penalties for an inaccurate return
If you send us an inaccurate return you may have to pay a penalty. Complete, readable and accurate records will help you fill in your return correctly and so help you to avoid this penalty.
However, people do make mistakes. You will not have to pay a penalty if you can show us that you took reasonable care to get your return right but still made a mistake. Some of the ways in which you can show you’ve taken reasonable
• keeping full and accurate records which are regularly updated and saved securely
• checking with HMRC or an agent or accountant if there is something that you don’t understand.
As a general rule, you should keep your records for a minimum of six years.