If you completed your self-assessment form to meet the HM Revenue & Customs ('HMRC' - formerly called the Inland Revenue) deadline in January, you will probably have found the process quite traumatic and wished that you had kept your financial records in better order.
Even if you are an organised person, do you know how long you should keep your financial records and how do you get hold of copies if you've lost them?
Bank and credit card statements
You must keep your bank statements for three years, or for six if you need to prove for your tax return that you have any savings interest earned. If you've mislaid any of your statements, you can ask your bank to provide them, but it may charge anything from £2.50 to £10 for each statement.
If you bank online, the bank may only archive statements that are more than a year old, so it is advisable to print out your online statements; otherwise, you may be paying the bank for it to access its archive.
Record-keeping and tax
HMRC can approach you at any time and ask to investigate your affairs for the last six years and it could be for further back than that. If you've failed to keep proper records, you can be fined up to £3,000 for that aspect alone. You could find yourself liable to penalties of up to the full amount of the tax you have not paid, and maybe even more than that. And, don’t forget, there will be interest to add for tax paid late. The other disadvantage of not keeping your finances in order is that if you have lost any records, you may not be able to prove your expenses and income to HMRC, resulting in your possibly paying more tax than needed.
To complete your tax return properly, you will need to file, amongst other papers, the following documents which are sent to you at intervals throughout the year:
• P11D benefits statement
• P60 end of year form
• P45 if you have changed jobs
• Proof of capital gains
• Statements of building society interest
• Dividend vouchers from shares and investments
• Details of rent receipts and related expenses
If you make any financial gifts, make sure to record them and if you are giving money or assets to your children or other relatives, you must keep the necessary records for a minimum of seven years.
Pension contributions
When filling in your tax return, you may have to provide evidence that you have made pension contributions. Your pension company should provide you with an annual pension statement, outlining the value of the fund currently, as well as your expected level of income at retirement. If you've lost track of your previous pensions, the Pension Service will be able to trace them for you.
Property and mortgage
Mortgage statements most be kept for at least three years (preferably six). Do check them to make sure that you are not paying too much interest.
Ensure that you know where you have filed your deeds to your house. If you have already paid off your mortgage, the building society may offer you the deeds back. The Land Registry keeps copies of deeds dating back to October 2003, so you will be able to get electronic records if this applies to your house. If your house pre-dates 2003, you can obtain the deeds from your solicitor or building society for a small fee.
Shares and share certificates
Always keep your share certificates, as it can be expensive trying to prove that you own them. Most people hold them in a 'nominee account' in electronic form to make sure that they are not damaged or stolen.
If they've been lost or stolen, you can obtain replacements by completing a Form of Indemnity from the registrar, which holds the share records. The company who holds the shares will be able to tell you his or her name.
Law stated as at 1 February 2006.