Tax is one of those necessary evils we can’t get away from. Whilst making the payments will probably never be a very pleasant experience, organising and filing the necessary documents needn’t be a headache if it’s approached with a logical method.

Getting Organised

Businesses need to keep on record a multitude of document types. These include details of all income received which may come from various sources and manifest in different forms:

• Payslips
• Bonuses paid
• Work-related benefits statements
• Share certificates
• Received dividends
• Social Security claims
• Capital gains
• Inheritance
• Income from other sources such as property

As well as information that relates to proof of income, other types of documents that need safe storage are related to business expenses or outgoings such as:

• Tax-deductible expenses
• VAT payments and claims
• Capital expenditure or investment
• Expenses relating to business premises or offices
• Wages to employees or payments to outside contractors
• Pension plans

There are likely to be other types of documents on your own personal list. Keeping track of this extensive paper trail can be challenging, not only in terms of organisation, but also in the space they take up.

Protecting Paper Documents

Over time, documents age. This is caused by the acids contained in many types of paper. As well as the chemical compounds already present in paper, external contaminants such as dust can accelerate their deterioration. Since businesses need to keep all their records for at least five years, safe, protective storage is vital.

If possible, keep all documents flat and unfolded and remove any sticky tapes or paperclips as these can cause damage over time. Acid free, paper lined boxes are the best way to preserve paper documents. Clearly label them with content and date information then store them in a dry, clean environment that is easily accessible for regular checking. If you work for a large company, you may be able to use Magnetic Warehouse Labels to ensure all documents are in the correct place. Boxes intended for storing paper archives are best because plastic bags or other sealable containers can retain moisture.

Security And Backup Archives

Hefty penalties may become payable should HMRC ask to see documents which you no longer have. Maintaining a separate, backup archive in an alternative location offers protection from disasters such as flood, fire or burglary. Whilst creating copies makes additional work in the first place, it safeguards you against additional cost and inconvenience if the worst should happen.

A surprising number of businesses find a storage solution for important documents in self storage units. The facilities are usually in easily accessible town centre locations and are fully secure. If your records are extensive you may need a room complete with filing cabinets for effective storage, or for smaller needs a locker may suffice. One of the important considerations is that storage should be scalable, so you can quickly expand or contract the space available as needs arise.

Cloud Document Storage

We may not have reached the stage of being truly ‘paperless’ in the office, but the multitude of cloud storage options currently available certainly makes life a little easier. The first step is choosing your provider, and there are a few considerations:

• Cost versus support: some providers of free cloud storage (Google, for instance) are quick and convenient to setup but offer no support if anything goes wrong.
• Consider encryption and other security measures.
• Decide whether you will need off-line access to files – for instance if file sharing is important during meetings at which Internet connection may be patchy.
• Investigate various storage plans (such as DataReady) as some charge a fixed fee whilst others charge depending on how much space you use.
• Check how often providers backup your files, and consider making your own external backup onto a removable hard drive.

The next step is preparing documents for cloud storage, with scanning being the easiest method of making digital copies. Give consideration to file size, as large files will increase the amount of cloud storage needed. Large files will also prove harder to email, whilst very small files could be difficult to read.

Effective storage of tax documents has two benefits – security and peace of mind if you are audited, and much easier end of year filing for you or your accountant.