The records to retain

The documentation is only needed on audit, and the audit comes years later. It is that distance in time that encourages postponing its preparation, and it is the same distance that makes preparation impossible afterwards.

Three elements in particular become irrecoverable once the site closes: the data of the systems and elements removed, the photographic record of the state before the works, and the consistency between invoicing and payments, which once set one way cannot be changed. None of the three can be reconstructed after the works end.

One point produces recurring questions and deserves clarifying. It concerns works that require no building consent.

Where the works require a building consent, that consent forms part of the records to retain, together with the approved drawings. The approved drawings should be kept in the version filed.

Where the works require no consent, the documentary reference is a substitute declaration in lieu of affidavit attesting the start date of the works and the fact that they fall among those eligible. The declaration should be made at the start of the works rather than afterwards.

That last document is often overlooked precisely because it concerns the lightest works, and yet it is the only element placing the works in time. On a deduction whose rate depends on the year the expenditure is incurred, and on a furniture allowance whose availability depends on the start date of the works, that placing in time is not a detail.

Documentation evidencing the planning and land registry regularity of the property belongs to the file, and is one of the elements audits focus on. The check precedes the start of the works.

The connection with the subject of building consents is direct: eligible works carried out on a property whose lawfulness cannot be demonstrated present a risk the deduction does not mitigate. The deduction does not cure a building irregularity.

For a professional setting up an appointment on existing stock, reconstructing the property's lawful status therefore precedes the tax assessment rather than following it. The order of the two steps is not a matter of indifference.

On works covering common parts the documentary mechanism is particular. The key document is the building manager's certificate.

The expenditure is incurred by the owners' association, and the deduction belongs to each owner in proportion to their share or under whatever different criterion has been resolved. A resolution can change the allocation criterion.

The document supporting the individual deduction is the building manager's certificate, attesting to each owner the share of expenditure attributable to them together with the necessary information. The certificate must be issued to each owner.

The professional advising the association produces the material on which that certificate rests: the accounts for the works, the separation of items by deduction where several reliefs apply, and the technical documentation. The separation of items should be set up in the bill of quantities.

The file must be kept for the tax assessment periods, not for the duration of the appointment. The appointment is far shorter than those periods.

Because the deduction is spread over annual instalments and each instalment claimed in a return opens its own period, retention extends well beyond completion of the works. Retention should be planned over a multi year horizon.

On a deduction spread over ten instalments, the last instalment is claimed nine years after the first, and the assessment period on that instalment runs from that return. The resulting retention horizon is long and must be organised rather than improvised.

The boundary between professional and client should be drawn in the appointment rather than reconstructed in a dispute. The boundary is worth setting out in writing.

To the client and their tax adviser belong retention of the expenditure and payment records, checking the personal conditions and claiming the deduction in the return. None of those activities belongs to the professional.

To the professional belong the technical documentation of the works, the certifications where due, electronic transmission where instructed, and producing the material supporting their own attestations. None of those activities includes assessing tax capacity.

The grey area concerns photographic records and the data of the elements removed. They belong formally to neither, which is why they are the items most often missing. Assigning them expressly in the appointment is the simplest measure to prevent their loss.

Postponing the building of the file to the closing of the site is the first, and makes the elements tied to intermediate states irrecoverable. The file should be built progressively rather than at the end.

Omitting the substitute declaration on works requiring no consent is the second, and deprives the works of their placing in time. The start date of the works then becomes impossible to demonstrate.

Retaining for the duration of the appointment rather than for the assessment periods is the third. Retention should be planned over a multi year horizon.

Not assigning responsibility for the photographic record in the appointment is the fourth, and is the most frequent cause of its absence. The assignment should be written into the letter of engagement.