As part of keeping invoices and legal documents for 6 years, does that include proof of postage receipts?

[letsjustgosomewhere]

For those who are self employed, we’re told by law that we have to retain invoices and other legal documents for 5 years now but does that include proof of postage receipts from the Royal Mail?

I’ve been keeping them but they’re taking up so much space and I already have PayPal and other electronic invoices with postage paid for by customers. Do I also need to retain the receipts for postage? I’m a sole trader and do all tax returns myself. I charge a little more than the customer pays for postage but this is due to commission charges by the marketplace sites I sell on.

I really appreciate to know if the electronic invoices would be legal enough and I can throw away the proof of postage receipts by Royal Mail as they’re taking up so much space and there’s too many to retain. They don’t always state the price on them either.

Thank you for your help if anyone is willing to share.

nope.

The electronic invoice with the postage cost should be fine.

Thank you for letting me know.

I keep mine and if one is missing my accountant always chases it

@FavouriteMug

I keep mine and if one is missing my accountant always chases it

Proof of postage slips have no financial value though. They literally just prove the time and date you posted something.

You would need to keep the payment receipt for the postage, but my understanding was that wasn't what the OP was asking?

I bought a cheap document scanner and just chuck all receipts through that and store it electronically though.

Most of the proof of postage receipts do state the price paid for postage, but not all.

I have electronic invoices from PayPal which state the postage paid by customer.

I don’t have a scanner to make the postage receipts electronic, that’s why I asked if just the electronic invoices from PayPal would be ok and I can throw out the postage receipts from royal mail.

The only thing is that I charge a little more postage cost due to commission charges from marketplace sites but that’s to do with PayPal.

No you don't need to keep proof of postage, just the receipt for money paid. It's just in case you ever get asked by HMRC to justify any figures, ie prove that you had that cost.

It's 6 years plus the current tax year you need to keep it for, so effectively 7 years. Insurance should be kept for longer.

@WitchDancer

No you don't need to keep proof of postage, just the receipt for money paid. It's just in case you ever get asked by HMRC to justify any figures, ie prove that you had that cost.

It's 6 years plus the current tax year you need to keep it for, so effectively 7 years. Insurance should be kept for longer.

I’m a bit confused. The proof of postage I have is the same thing as postage paid for receipt at the post office.

They’re just taking up so much space and I don’t think I can cope with it any more so wondering if just retaining the electronic invoices from PayPal that customers paid for postage would be ok? Then I can throw out the Royal Mail receipts?

you need to keep any receipts that prove you paid for/ bought something. Including postage.

You don't need to keep proof of postage slips that don't show a financial transaction has taken place.

As an aside you can buy postage online - you could always do it that way and then your postage payment receipts are automatically electronic?

Does the PayPal invoice show what you purchased or is it just generic you paid the post office but not what it's for? If it's the later I wouldn't risk getting rid.

How much paperwork are we talking? Can you box it and shove it in the loft out of the way?

sorry my initial advice was confusing - I thought you were meaning the postage tracking slips and not the payment receipts

if you are collecting so many postage receipts that they are filling more than an A4 envelope a year then it really probably is worth doing it online or getting a scanner. My desktop scanner was about £40 but you can get apps on your phone that do virtually the same thing for less.

@WitchDancer

Does the PayPal invoice show what you purchased or is it just generic you paid the post office but not what it's for? If it's the later I wouldn't risk getting rid.

How much paperwork are we talking? Can you box it and shove it in the loft out of the way?

The PayPal invoices are emails I have that the customer paid for the item plus the postage cost.

Really getting concerned about all of these paper receipts because they’re taking up so much space especially since it’s retaining 6 years

@Scrowy

if you are collecting so many postage receipts that they are filling more than an A4 envelope a year then it really probably is worth doing it online or getting a scanner. My desktop scanner was about £40 but you can get apps on your phone that do virtually the same thing for less.

I can’t take clear photos of the receipts. But even doing that is time consuming to backtrack 6 years worth and store them, not even sure where I’m supposed to store electronically besides emailing them to my business email address where all the invoices are retained. Not to mention, not all postage receipts have the prices on them so don’t get why the invoices showing postage paid by customer can’t be substitutes.

I meant I CAN take clear photos of them. That was a typing error.

@Scrowy

you need to keep any receipts that prove you paid for/ bought something. Including postage.

You don't need to keep proof of postage slips that don't show a financial transaction has taken place.

As an aside you can buy postage online - you could always do it that way and then your postage payment receipts are automatically electronic?

The only time I buy postage online is via a courier who send out an invoice but Royal Mail don’t have such a thing. It’s always go to post office and pay there, then you get a receipt which sometimes states price for postage on it and other times does not. It’s called certificate of postage/ proof of postage but it’s typically a payment receipt.

I’m getting anxious at not having the ability to control the amount of receipts from 6 years. It’s not even about having a lot of transactions, it’s just that it’s so many years worth and they’re currently stored in boxes but I can’t go on like this any more.

I can take clear photos of them and store them in inbox with rest of invoices but as I said it’s time consuming back tracking 6 years and should be unnecessary if I have invoices stating customer paid postage cost. It says item costs plus shipping costs in my invoices and is clear. Just don’t know if that’s legally ok.

send.royalmail.com/

You really can do postage online with royal mail. I use it all the time!

No the invoices aren't sufficient. They just prove what you charged the customer. It entirely separate to any charges you have at the post office (even though you know the two things are linked) so you need to have a corresponding receipt to evidence that the transaction out of the account at the post office was for postage for your business.

I store my electronic receipts in a folder on my computer called 'accounts' and then the correct quarterly folder within that folder. Most of the receipt scanning phone apps will convert it to a pdf for you rather than a photo. I don't actually need to do this though as we have been subject to Making Tax Digital for a few years so all my documents have a copy within my accounting software.

Just how much space are these receipts taking up?

The PayPal etc documentation are proof of your INCOME from the customer.

You also need proof of your EXPENSES to claim tax relief on them.

If you couldn't prove your expenses HMRC could try to disallow them, then you'd be taxed on the income not the profit.

Can you see the difference between the 2 bits of paperwork?

Rather than scanning/photographing 6 years worth how about starting doing it now, and throwing out a years worth as they pass the 6 year mark until you are fully electronic?

I also agree about confusing income with expenditure. Charging a customer for postage is one thing OP but it won't prove to HMRC that you actually paid for the postage. For that you need the postage receipt and they will expect you to still have them.

@Scrowy

send.royalmail.com/

You really can do postage online with royal mail. I use it all the time!

No the invoices aren't sufficient. They just prove what you charged the customer. It entirely separate to any charges you have at the post office (even though you know the two things are linked) so you need to have a corresponding receipt to evidence that the transaction out of the account at the post office was for postage for your business.

I store my electronic receipts in a folder on my computer called 'accounts' and then the correct quarterly folder within that folder. Most of the receipt scanning phone apps will convert it to a pdf for you rather than a photo. I don't actually need to do this though as we have been subject to Making Tax Digital for a few years so all my documents have a copy within my accounting software.

Just how much space are these receipts taking up?

I cannot buy postage online, unless I use a different courier. It can only be done via the post office, I’m not always the one who is running to the post office each time an order has been made. Most of the time, I have a family member helping out.

I found another thread who clarified why both receipts of what the customer paid and I paid for postage need to be retained.

The only place these receipts will be retained is in emails sent to business emails with the rest of my invoices. I do not have space for storing receipts on computer or flash drives, so it will be emails. Just not looking forward to wasting so much time taking clear photos of these receipts.

@Chasingsquirrels

The PayPal etc documentation are proof of your INCOME from the customer.

You also need proof of your EXPENSES to claim tax relief on them.

If you couldn't prove your expenses HMRC could try to disallow them, then you'd be taxed on the income not the profit.

Can you see the difference between the 2 bits of paperwork?

Rather than scanning/photographing 6 years worth how about starting doing it now, and throwing out a years worth as they pass the 6 year mark until you are fully electronic?

I think it’s just changed to 5 years now. I checked the Gov website.

As an aside set up a business account using click and drop then drop at the post office, so much quicker than queuing and paying manually.

Also chances of hmrc wanting to see every single/bill invoice is low.

Do you have to pay for the business account with Royal Mail?

So they calculate postage based on you weighing and measuring the parcels? I don’t have a printer to show them any pre-paid postage.

If you have an iPhone it has a scan facility for use going forward

I always kept mine as they showed the price paid to the post office for each package. If it has no financials on it then I would keep for a year (believe me customers do chase delivery after several months). Get some cardboard folders, date them, and put them in a storage box when full. If you have got that many, then really you should be looking at getting a business account with Royal Mail, and it's all digital then. I think I was sending around 20-30 a day when I switched over.