How long are records of tax paid, held for?

Question

a freind of mine has just been issued with a demand for unpaid tax from 10 years ago while he was self employed.Although he paid all of his tax about 8 years ago, he cannot find any paperwork. Will the Inland Revenue have records from 8 years ago? Thankyou.

Answer 1

It used to be 6 years before self assessment began that you needed to keep records for but if the Inland Revenue have reason/information to believe income has been received and not declared with no tax deducted they can issued assessments 10 years in the past even further if they wish. To do this they must have some information that has recently come to light.

As by law he is not obliged to have kept any paper work (though always keeping receipts of tax paid is a good thing) I suggest he asks them for a full breakdown of how the tax has been calculated and where the new liability has come from.

If he has failed to declare something he could be in trouble.

If it is due and payable (he has the right to appeal) there will be interest and penalties due and he may need to come to an arrangement to pay.

With self assessment now you do not need to keep your papers more than two years once a year is settled but as you can make retrospective claims for earlier years I would always suggest keeping them.

Good Luck

Answer 2

6 years

Answer 3

AS I recall,there is what is called an Extra Statutory Provision covering this.I think it number 19 but have not looked at it lately.Basically,he/she can apply to have it struck off as tyhe Revenue have not made timely use of the information.I have a nasty feeling that tax debts are not subject to the Limitations Act of 6 years,as for ordinary debts & 12 for real property debts.

Answer 4

The IR are a law unto themselves...I would have thought that after 6 years unless they have reason to believe otherwise..they could.

Make an appointment with your accountant urgently if there is an investigation afoot...its going to cost you a lot of money with the amount of work the accountant will have to do on your behalf... leave it to the professionals and dont dare go it alone with the IR.

Answer 5

In my State (need to keep confidential as I work for state gov.) we hold the tax records for Individual Income tax for over 20 years. We can go back that far to collect on it. There are several databases we can check also for paid tax liability. In your friends case though, being in a different state could be totally different.

Answer 6

In the UK the IR advises that ordinary people keep their records for 7 years, but I understand the IR have the power to ask for older records if they wish, presumably if they suspect something big.

I do not know if it is the same for businesses, but in view of their greater complexity and larger sums involved, they probably have no time limit.

Answer 7

I believe law says 7 years. But at what time they take it from paper and put to disk and where they store the records is different. But the IRS has rules and regulations on everything.

Answer 8

It used to be 7years. But that may have changed now to life.
That means the life of the governments that may follow one after another.
So you are stuffed by them (The governments)
Do what ever they like and you have no say in it any more.

Answer 9

minimum for the rest of ya life

Answer 10

Ever