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What are VAT records and how long should you keep them?
Sep 05, 2017

There are distinct rules that VAT registered businesses must follow regarding retention of VAT records.

Records include:

  • a record of sales and purchases, and
  • a separate VAT account.

Generally, a business must keep VAT business records for at least 6 years (or 10 years if they use the VAT MOSS service). By special permission, HMRC may allow you to keep some records for a shorter period. For example, if the 6-year rule causes you serious storage problems or undue expense.

The VAT records can be held on paper, electronically or as part of a software program. There are no specific VAT rules about using a computer. Records used for other tax purposes may need to be kept for longer periods.

There are financial penalties that can be levied for a failure to keep or produce the VAT records required by law.

Planning note:

Regarding the issue of a VAT sales invoice:

  • There is no requirement to issue a VAT invoice for retail supplies to unregistered businesses unless the customer requests a VAT receipt.
  • A simplified VAT invoice can be used for supplies of up to £250. There are also specific situations where a VAT invoice does not have to be issued, for example if your customer operates a self-billing arrangement.

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