Keeping records

As an employer you will have to keep records about your employees. This page tells you more about the records you need to keep.

What records do I need to keep?

          Basic information
          Payroll records
          Other records

How long do I need to keep my records?
What happens if I don't keep accurate records?
Data protection considerations

What records do I need to keep?

There are certain worker and employer records that you must keep by law. There are other records you should keep as a matter of good practice. It may be helpful to think about the ‘must keep’ records in three separate chunks – basic information, payroll records and other records and we talk about these in detail below.

In terms of the ‘should keep’ staff records, here we are thinking of information on matters like:

  • training and appraisals
  • records of lateness
  • any disciplinary action you have ever taken
  • terms and conditions of employment including any correspondence relating to changes to their terms and conditions, CV/application form, references and other essential checks and details of termination of employment.

The information may be stored in a variety of ways such as paper files or on a computer.

There is a detailed guide on record keeping available on the ACAS website.

Basic information

You must gather and keep the following basic information about your employees(s) such as:

See here for information about other personal information you can keep on your employee record, e.g. emergency contact details, details of any work relevant disability, qualifications and so on.

Payroll records

It is essential you keep accurate payroll records so that HMRC can make sure that you and your employees are paying the right amount of tax and NIC, and that your employees are getting any statutory payments they are entitled to (such as sick pay and so on).

You should note that the required details will be recorded automatically if you use a payroll program to help you with your payroll tasks. As with any computer program it is recommended you keep regular “backups”. A back up is a “snapshot” of the information on the computer program at a specific date. In any loss of data, you can then at least start off from the point of your last back up.

If you are going to carry out your payroll tasks manually (i.e. on paper), your records must include:

  • employee’s gross pay (before deductions)
  • their National Insurance contributions
  • the amount of tax you deduct under Pay As You Earn (PAYE)
  • Student Loan deductions
  • Tax code
  • any statutory payments made, like Statutory Sick Pay and Statutory Maternity, Paternity or Adoption Pay
  • any details of any taxable benefits and expenses.

Much of this will be satisfied if you keep copies of your employee’s payslips, however you must also keep your calculations for working out the tax, employees NIC and employers NIC and so on, along with details of all payments you have made to HMRC. Form RT11 will  help you here.

Both online and paper filers should make sure they keep any supporting hard-copy documents somewhere safe in case HMRC want to see them. Such documents may include your employees P45 from their previous job, or starter checklist.

Top Tip: Take a photocopy of all submissions you physically post to HMRC or your employees, e.g. RT2 if you are a paper filer, P11D, P60  and send them registered post or something similar if you can.

Other Records

You are also required to keep other records so that checks can be made that you are complying with things like the National Minimum Wage, auto-enrolment and other legal matters (see our employment law section for more information):

  • Rate of pay and hours worked including overtime and bonuses
  • Pension details
  • Accidents, injuries and dangerous occurrences – to meet health and safety requirements
  • Holidays and other days of leave, e.g. details of any absences for sickness (you should also keep records of supporting medical evidence), maternity/paternity leave (you should also keep records of supporting evidence that the employee provided you with to claim their statutory pay) or leave for any other reason, authorised or unauthorised.
  • You must also keep records to ensure that daily and weekly working time limits and night time working time limits (under the Working Time Regulations) are being complied with.
  • Evidence of the employee's right to work in the UK.

It is up to you to determine what records you need to keep for these purposes, but you may be able to use existing records maintained for other purposes, such as pay to help you.

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How long do I need to keep my records?

You need to retain your records for the current and three previous tax years. Records for 2016/17, should therefore be kept until at least 5th April 2020. 

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What happens if I don't keep accurate records?

It’s in your interests to keep accurate payroll records as it will help you pay the correct amount of PAYE tax and NIC on time. If you do not you could face a penalty of up to £3,000

HMRC can ask to see your records as part of a PAYE check.  

If your records are lost, stolen, or destroyed and you can’t replace them, you must tell HMRC as soon as possible and do your best to recreate them.

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Data protection considerations

You must follow rules on data protection if you store personal information about your staff.

Under the Data Protection Act 1998 any personal information you keep on your staff should be adequate, relevant and not excessive. It must also be ‘accurate, up to date and kept no longer than is necessary’. When employers really no longer need to keep certain data, destruction must take place securely and effectively, for example by shredding.

Employees have the right to access their records. Before releasing such data to a third party, the employer must seek the permission of the individual concerned.

You must make sure the information is kept secure – e.g. in a locked cupboard or password protected and virus protected computer.

You should be aware that there are even greater security requirements in respect of ‘sensitive personal data’ including physical/mental health conditions, as if this information is compromised or lost then there could be greater harm caused to the individual.

You can find out more on data protection on the GOV.UK website.

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