It is a legal requirement in the UK that businesses keep and retain records relating to the business transactions and accounts and that they are able to present these to HM Revenue and Customs (HMRC) upon request. Even those who are self employed need to be scrupulous with their accounting records if they want to avoid disruptive investigations by HMRC later down the line.
With data protection hot in the minds of the UK’s businesses, it is critical that you know what you should be keeping as business archives and what can be discarded, as well as knowing how long you should keep things for and why.
If you do have confidential documentation that can be discarded it is essential that you use professional confidential waste disposal specialists to ensure the sensitive paperwork is handled securely and shredded effectively. Look for a company with professional accreditation in handling confidential waste.
- Value Added Tax
VAT records, by law, need to be kept for a minimum of 6 years unless you have a specific notification from HMRC that the period is shorter.
- PAYE records
Although there is no legal requirement to keep PAYE records, HMRC recommend a period of at least 3 years after the end of the tax year in which they are active.
- Company tax
As a rule of thumb, business records should be kept for a minimum of 6 years to ensure you are able to prove adequate tax payments have been made. The self employed are not immune either, as they should be able to prove tax payments back to the beginning of the business if they wish to escape rigorous interrogation by HMRC.
The statutory requirement for records is six years. The Companies Act states that any entries of a former member of the company can be removed from the register when 10 years has passed, so this is a good marker to the maximum time company records should be kept.
Grants that come from the Government should be fully recorded and documented, and these records should be kept for a minimum of five years after the activity. If the grant aid is ongoing, then all records since the start of the activity should be maintained, unless the permission of the department is sought to destroy the records.
The Employers Liability Policy certificates would previously have had to be held for up to 40 years, however this requirement has recently been changed to accommodate the more modern business. Now the guidance is that business are aware of their liability for illness and injury at work, and that this liability does not necessarily expire when the policy does. Businesses should ensure they have accurate records themselves of their liability insurance so that any future claim can be met.
As a rule of thumb, all business records should be held for a minimum of 6 years after the end of the tax year in which they were applicable. To keep your records safe and secure, and to alleviate your office from the clutter of storing them consider the self storage London facilities as an alternative to on site storage.