A company has a legal responsibility to keep company records and accounting records. Consequently, a company director must keep records about the company itself, as well as ensuring the accounting records are maintained.
As a company director, you must keep records for at least six 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 six years, i.e. fixed assets
- HMRC has started a compliance check into your Company Tax Return.
As an example, if your accounting period ends on 31 March 2018, you’ll need to keep the records for that period until at least 1 April 2024.
How should I keep the accounting records?
A business owner is legally required to keep adequate accounting records in order to prepare year end accounts and tax calculations. With the development of technology, company records can now be digitised, making it easier and cheaper to store. In this case, hard copy documents are then not required to be retained.
If you don’t retain your records for the required time period, HMRC can impose penalty charges. Penalties increase based on the seriousness of the offence – from £250 for a business in its first year of trading to £3,000 for deliberate destruction of records. If you fail to meet your director responsibilities for keeping records, you could be disqualified.
Why Choose Accountspoint?
Accountspoint was set up to offer its accounting and business services to small businesses across the UK. With many years experience in the small business and contracting market, Accountspoint has the reputation and credibility you can trust. Our goal is simple, to fulfil your accountancy needs with a quick, professional service.
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If you’d like to find out more about how Accountspoint can help you and your business, please give us a call on 01332 650226 or request a call back.