Keeping Accounting Records past 6 years

[commadus]

So I have accounting records since 2003 when the business was created.

Is there any benefit to me to continue keeping them?

Legally I should have my accounts from 2012 (6 yrs from my last accounts)

Do most people just keep their records?

 

[Mr D]

I destroy old records not needing to be kept.

 

[The Byre]

Is there any benefit to me to continue keeping them?

Legally, you are obliged to keep all bookkeeping paperwork for 7 years. HMRC, however, can go back 20 years if they suspect tax fraud and if there are no records, thay can make assumptions that you may disagree with - and their powers are absolute! For that reason, we keep everything for 20 years.

 

[Victoria_V]

Assuming you are running your business as a LTD company, you are legally required to keep your accounting records for the last 6 years from the end of the last financial year end or longer in certain circumstances. However it is good practise to keep them for longer in case the HMRC have a query on any transactions from prior periods.

http://www.gov.uk/running-a-limited-company/company-and-accounting-records

 

[commadus]

Yes. It's a LTD company. I was just wondering what people do over and above the Law, I know legally its 6 years but never knew they can go back 20 years.

 

[The Byre]

The law requires you to keep everything for about seven years (i.e. six years from the end of your last F. year) and I believe (I 'm not sure for the UK) ten years for the actual record of entries. That is the legal obligation. That hardly means that you should burn the lot after ten years and hope that HMRC will never come a-knocking!

If they suspect tax fraud, they can (at the moment) go back 20 years and if you do not have any records to cover the suspect period, they can and do make assumptions - for example, you received sums of money from abroad and you have no paperwork to prove that this was taxed already - then they can ASSUME that it was untaxed income and either demand those assumed-missing taxes with interest and may even issue fines - despite the fact that taxes were indeed paid. You just can't prove that you paid your taxes.

There are discussions being held to lengthen the period under certain circumstances.

 

[MyAccountantOnline]

So I have accounting records since 2003 when the business was created.

Is there any benefit to me to continue keeping them?

Legally I should have my accounts from 2012 (6 yrs from my last accounts)

Do most people just keep their records?

I do keep all records just in case they are needed but as they are stored electronically its not an issue.

For the average business its very unlikely that you'd need records going back more than 6 years but if they are old paper records and storage is an issue could you perhaps look at scanning them and keeping them electronically?

 

[AllUpHere]

Records aren't just for the tax man, they can be useful for all sorts of things. I tend to keep them indefinitely.

 

[MyAccountantOnline]

I do keep all records just in case they are needed but as they are stored electronically its not an issue.

For the average business its very unlikely that you'd need records going back more than 6 years but if they are old paper records and storage is an issue could you perhaps look at scanning them and keeping them electronically?

AllUpHere made a very valid point and to clarify my comment above was referring to records being required for tax purposes.

 

[commadus]

Does this then also apply for closed companys? I have to keep them 6 years after they have been closed down and possibly upto 20 years?

 

[Mr D]

Are there not records that have to be kept much longer? 40 years?

 

[commadus]

I was unware of this requirement below.

Keeping records
You must keep business documents for 7 years after the company is struck off, eg bank statements, invoices and receipts.

If the company employed people, you must keep copies of its employers’ liability insurance policy and schedule for 40 years from the date the company was dissolved.

 

[nelioneil]

Are there not records that have to be kept much longer? 40 years?

I believe you are right. I think employers liability policies may need to be kept for 40 years.