If you've just been completing your self-assessment form to meet the Inland Revenue's deadline last month, you'll probably have found the process quite traumatic and wished that you'd kept your financial records in better order.
Even if you're 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 liaise with an online bank, it may only archive statements that are more than a year old, so it's advisable to print out your online statements; otherwise, you may be paying the bank for it to access its archive.
Record-keeping and tax
The Inland Revenue can approach you at any time and ask to investigate your affairs from the last six years. If you've failed to keep proper records, you can be fined up to £3,000. The other disadvantage of not keeping your finances in order is that if you've lost any records, you may not be able to prove your expenses and income to the Inland Revenue, resulting in you possibly paying more tax than needed.
To complete your tax return properly, you will need to file the following documents which are sent to you at intervals thoughout the year:
- P11D benefits statement
- P45 if you have changed jobs
- P60 end of year form
- Statements of building society interest
- Proof of capital gains
- Dividend vouchers from shares and investments
- Rental income statements
If you make any financial gifts, make sure to record them and if you're 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're not paying too much interest.
Ensure that you know where you've filed your deeds to your house. If you've 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 electric form to make sure that they're 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.
12 October, 2005