House drowning in paperwork- help, ideas needed please!

[funnyperson]

My house has clutter everywhere and it is all paperwork- children's nursery folders, gcse and A level notes (they are at uni) my notes from uni ( 30 years ago) in the spare room. Work folders and papers- 20 years worth- files of tax returns, folders of bank statements, in the dining room and bedrooms, not to mention bags of unopened recent and not so recent mail in the hall and kitchen.
It is all chaotic and out of hand. I need advice on how to manage the paper work. Anyone? How do you manage your paper work- old and new, and I am way beyond the neat little folding multi compartmented folder stage here. I am talking major declutter without offending the taxman or DC. I can't do it myself. I don't know how. I need help.
Flylady is all clothes and laundry and kitchen. What does one do about the paper?

Get rid of everything that isn't needed, when was the last time you actually used any of the uni notes? Things which you may need to refer back to but don't need originals of can be scanned onto computer then saved to memory sticks and paper versions disposed of. Go paperless with everything you can now eg bank statements, so you are adding as little as possible to the existing paperwork. Open and sort post each day so it stops building up. If you still have masses of paperwork you just can't get rid of, buy a filing cabinet, at least it will keep everything tidy and organised. I doubt very much if you need paperwork going back as far as you have got, and the majority of what you have, you could probably request copies of if you ever need it! Only paperwork I keep now is current insurance policies, loan agreements (until loan is repaid) and last 2 years payslips and p60's!

Thank you rockchick thats really helpful- I already have a filing cabinet, two cupboards and two book cases full of files and paper as well as suff in the garage and on the floor. Scanning it in isn't realistic. How far back do people keep things like invoices etc?

What have people found to be the most practical storage solutions for a; stuff not active and b; active stuff
Is a 'home office' the way to go?