Every business in the UK has an inherent need for records to ensure it can report matters to various authorities. However, the duration of retaining these and the expense incurred need not be prohibitive.
Records about the company
You must keep details of:
- directors, shareholders and company secretaries
- the results of any shareholder votes and resolutions
- promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to
- promises the company makes for payments if something goes wrong and it’s the company’s fault (‘indemnities’)
- transactions when someone buys shares in the company and loans or mortgages secured against the company’s assets
For Tax Purposes
Every business that trades in the UK is required to retain financial and trading records of that trading for 6 years from the end of the last company financial year they relate to, or longer if:
- they show a transaction that covers more than one of the company’s accounting periods
- the company has bought something that it expects to last more than 6 years, like equipment or machinery
- they have sent their Company Corporation Tax Return late
- HMRC has started a compliance check into a Company Tax Return
- You must keep also VAT records for at least 6 years (or 10 years if you use the special VAT Moss Service).
However, HMRC go on to say that you can keep VAT records on paper, electronically or as part of a software program (e.g. book-keeping software). Records must be accurate, complete and readable. You can be fined £3,000 by HMRC or disqualified as a company director if you don’t keep accounting records. So, the question to address is what form of retention can be applied to the voluminous records that most businesses have.
We can recommend which records you need to keep and even have sources who can keep them for you.