Company and Accounting Records

Date of publication: November 2018

When running a limited company you need to keep books and records of your business. There are strict record-keeping, accounting and reporting requirements for HMRC and Companies House. Failing to keep accurate and complete records can lead to penalty charges being implemented or disqualification as a company director.

Records about the company

You must keep details of:

• Register of company directors, company secretaries and shareholders
• Results of any shareholder votes and resolutions
• Promises for the company to repay loans at specific dates in the future (‘debentures’)
• Loans or mortgages secured against the company’s assets
• Directors indemnities
• Contracts relating to purchase of shares in the company

Register of people with significant control (PSC register)

(see quick guide: http://www.ouryclark.com/site-assets/pdf/quick-guides/general/OC-Quick-Guide-PSC-Register.pdf)

Your register must include details of anyone who has:

• more than 25% shares or voting rights in the company.
• right to appoint or remove a majority of directors.
• influence or control over the company via any other means.

A return is still required if there are no people with significant control

Accounting records

You must keep details of:

• All income and expenditure
• Assets  owned by the company
• Stock the company owns at the end of each financial year
• The stocktakings used to work out the stock figure
• Company liabilities
• Amounts owed to or due to the company
• Who goods and services were bought from and sold to (the exception to this is retail sales)

Financial records must be kept in order to prepare annual accounts and Company Tax Returns including bank statements, receipts, petty cash books, orders and delivery notes. Invoices, contracts, sales books and till rolls should also be kept.

Companies registered as employers must also keep PAYE records to complete annual PAYE returns, calculate PAYE and NIC’s and show employees are receiving all statutory pay  to which they are entitled.

How long to keep records

Records must be kept for 6 years from the end of the financial year they relate to or longer if:

• The company has bought something they expect to last longer than the 6 years
• The tax return was sent late
• A transaction the covers more than one of the company’s accounting periods
• HMRC has begun a compliance check into your Company Tax Return.

Companies House will assume all records are held at a company’s registered office address unless otherwise notified.

We would recommend that key contracts and documents are retained beyond statutory limits.

ACC21

Disclaimer: This note does not contain a full statement of the law and it does not constitute legal advice.  Please contact us if you have any questions about the information set out above.