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How long do you have to keep company records (paperwork)?

Discussion in 'Money, Finances, Tax & Accounting' started by Kay, Jun 23, 2009.

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    Kay

    Kay Senior Lab Tech

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    Off the top of my head I seem to remember that for tax purposes you have to keep ltd company accounts and records for six years. Is that right? I know I could look it up but I'm not in the mood for wading through statutes, bleurgh.

    Legally, how long do you have to keep the paperwork before you can chuck it?
     
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    TechFox

    TechFox Freshman

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    I would recommend keeping all your paperwork and never throwing any away.
     
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    Kay

    Kay Senior Lab Tech

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    Yeah, I agree about keeping the important stuff, but there's a lot of completely useless stuff too, such as vouchers for stationery purchases years ago, phone bills going back nearly ten years, documents relating to assets which were disposed of years ago, etc, etc.

    I need to know when it's legally allowed to chuck these out. How long to I have to keep the paperwork for before I can chuck it?
     
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    NikkiPilkington

    NikkiPilkington Lab Tech

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    I thought it was 6 years too - we scan everything every year and store on DVDs
     
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    Paul Norman

    Paul Norman Senior Lab Tech

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    You need to keep essential accounting documents for 7 years, I believe. Insurance certificates much much longer.
     
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    matt.chatterley

    matt.chatterley Web & Software Developer Premium Member

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    I thought it was 8 - lol!

    Our policy however, is to keep everything (as TechFox says). Once we outgrow the available physical storage (or once we have lots of records accumulated - only 3.5 yrs to date), the plan is to scan them and have them properly archived.

    We also duplicate anything which is 'critical' and store it offsite.
     
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    Kay

    Kay Senior Lab Tech

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    Well, I feel sorry for filing cabinets with an obesity problem and would like to help them go on a weight loss programme. I want to chuck some stuff out!
     
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    Ray Stewart

    Ray Stewart Lab Manager

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    It is 6 years - not including the year you are in at the moment.

    There is a dilema though. We are strongly recommended to protect our identities by cross-cut shredding anything that can be used - bank statements, credit card statements, utility bills etc. But when I use that arguement in a Tax investigation it cuts no ice and the client is ordered to get copies from as many sources as possible, often (for bank statements) at a cost of up to £15 per sheet.

    My take on this is to scan everything as it comes in each day into the paperless office system which is then backed up every evening offsite. I have been using this method for 8 years now and no longer have any paperwork around at all. But if required, I can reproduce any piece of paper within a few seconds from the system.

    The best thing (and my constantly recommended suggestion) is to keep everything to comply with the 6 year rule and then have it securely destroyed by a commercial waste management company - they will give a certificate of secure destruction that complys with the Data Protection act and which you can poke in the eye of a Tax Inspector if the need arises.
     
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    Kay

    Kay Senior Lab Tech

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    Excellent reply, thanks, Ray. That was the info I was looking for.

    Re getting copies of ancient stuff, can the tax people really compel me to buy copies of ancient documents? Or could I say that if they want them, it's their responsibility to buy them because they're more than six years old?

    I can't be bothered with scanning stuff and am not keen to take up any more space in the company's registered office. For heaven's sake, do they really need a voucher for a box of paper clips I bought years ago?

    I've got all the important stuff - accounts, asset register, etc, etc. I just want to shed the dross.
     
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    Ray Stewart

    Ray Stewart Lab Manager

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    The compulsion for producing records only applies up to 6 years and they regard it as your own fault if you no longer have them.

    As far as the paperclip invoice goes, it is a part of your records and should therefore be in the bundle/box/file for the relevant year.

    Any payments unsupported by invoices are viewed with suspicion - mostly they only look at stuff over £100 or so - but don't use that as an excuse either!
     
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    Kay

    Kay Senior Lab Tech

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    So, I think you're saying, Ray:

    If the tax people want to look at anything within the last six years of the company, then I'm obliged to produce it.

    I can chuck anything older.

    No problem.
     
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    Ray Stewart

    Ray Stewart Lab Manager

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    Not chuck exactly - but yes - securely dispose of :D
     
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    Kay

    Kay Senior Lab Tech

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    Ray, the filing cabinet thanks you from the bottom of its drawers. :cool:
     
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    Paul Norman

    Paul Norman Senior Lab Tech

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    Like Ray, I keep all copies electronically. I was asked for some recently, and the person at the tax office requested that I print them and send them to her! I was a little intrigued by the request!

    I did suggest an email - we dont have email, she replied. I suggested putting them on a server and sending her a link...not acceptable. So, I printed them and sent them. Three times, because the first two got lost in the HMRC system!

    Just a pointless anecdote! At least I could produce them.
     
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    Kay

    Kay Senior Lab Tech

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    How usual is it to be asked these questions and be investigated?

    I'm not worried about it because we've got all the records and stuff, but it seems that they do probe into your businesses sometimes. I wonder why that is - perhaps a case of envious competitors reporting you or something. The tax people are welcome to look at our stuff if they've got nothing better to do. It just seems strange to me that they look at small companies in this way when they could be looking at much bigger fish. :?:
     

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