Chapter 7 - Record keeping

84. Duty to keep records

Summary

This section provides that every accountable person who supplies goods or services in the course or furtherance of business must keep and preserve certain records in connection with their activities. Records must normally be retained for 6 years from the date of the latest transaction to which they relate.

Details

(1) Subsection (1) provides that accountable persons must keep full records of all their business transactions that affect or may affect their liability to tax and entitlement to deductibility. The details to be kept are set out in Regulation 27 of the VAT Regulations 2010.

(2) Unregistered business persons – for example small traders who have not elected to register – must keep the invoices issued to them in connection with their business purchases.

(3) The records that a trader is required to keep include linking documents and must normally be preserved by him/her for 6 years. This is designed to provide sufficient time to enable the trader’s returns to be checked against his/her books by Revenue officials.

Records required to be kept under the special schemes for supplies of telecommunications, broadcasting and e-services must be retained for 10 years from the end of the year in which the supply was made – sections 91B(14), 91C(7), 91D(14) and 91E(7) refer.

(4)(a) Subsection (4) also deals with time limits for records, and extends the period for certain property transactions. It provides that a person who develops property or acquires a taxable interest in developed property must retain records relating to those transactions for such time as they hold a taxable interest in the property plus a further period of 6 years.

(4)(b) Also, if a person opted to waive their right to exemption from tax in respect of a short term letting of a property under the old property rules (see section 96), then, the records relating to the acquisition or development of that property must be held for the duration of the waiver plus a further period of 6 years.

(4)(c) Where a transaction is the subject of an inquiry, investigation, claim, appeal or legal proceedings which extends beyond the 6-year retention period, the records relating to that transaction, and to any return impacted by that transaction, must be retained until the inquiry, investigation, claim, appeal or legal proceedings has been finally determined.

This provision will only apply where an inquiry, investigation, claim, appeal or legal proceedings have commenced within the normal 6-year retention period and that inquiry, investigation, claim, appeal or legal proceedings or any further appeals or legal proceedings have not been determined within that period.

(5) The 6-year time limit does not apply in cases where Revenue has notified the person that he/she does not need to keep the records.

(6) Linking documents are defined as documents drawn up in the making of accounts and returns showing the calculations linking records to those accounts and returns.

Relevant Date: Finance Act 2020