There’s no time like the present to boost your record-keeping skills. Here’s how long to keep business records UK!
(3 minute read)
Today we’re learning:
- Which documents to keep
- How long to keep business records UK
- Top tips for record-keeping
Top Tip: If you’re the type to get buried beneath a mass of unordered paper, scan and store documents digitally. Paper copies aren’t needed so providing your scans are complete and legible, you’re good to go. (Just make sure to name digital files properly; keyboard mash isn’t good for anyone!)
How Long to Keep Business Records UK?
If you own a limited company, you must keep all business records for six years beginning from the end of your current accounting period.
It’s simpler for sole traders, as you’ll be taxed through the Self Assessment process. You’ll only have to keep your records for five years beginning from the end of your current accounting period.
Capital Gains Tax
The Capital Gains Tax records you need to keep will depend on the asset and method of transaction. You should at least keep:
- Documents describing the asset (including valuations)
- Contracts relating to the transfer (including purchases, exchanges, inheritances, and gifts)
- Any related bills
- Relevant correspondence (e-mails, letters, etc)
When operating as a company, you must keep these records for Corporation Tax:
- Receipts, till rolls, invoices etc that show money spent and received
- Details of all sales, both incoming and outgoing
- Records of who you sold to (unless retail)
- Details of assets and stock at the end of the fiscal year (as well as stock takings)
- Records of debts you owe or are owed
- All bank statements and relevant correspondence
When your VAT taxable income exceeds £85,000, you must register for VAT. This applies to both limited companies and sole traders.
You need to hold onto these records:
- Sales, purchases and other standard business records
- A VAT account and VAT invoices
- Records of items where you can’t reclaim VAT and on items that are zero-rated, reduced or exempt
- Items removed from stock as gifts or for private use
- Details of any self-billing agreements
- Credit and debit notes
- Import and export notes
Unlike most other business records, you only need to keep PAYE for three years.
You should keep:
- Records relating to employee payments (including deductions)
- All payroll-giving scheme documents
- Records of benefits and expenses, eg, company cars
- Details of employee absences
- Records relating to payments made to HMRC
- Tax code notices
- Workplace pension documents
Remember: You need to let HMR know if you’re using estimates for any part of your payroll reports and say if these figures should be accepted as final or will be updated with actual data later.
“That’s a lot to keep track of!”
It’s true, keeping track of all your records can be a time-consuming hassle. That’s why many businesses, especially SMEs, benefit from hiring an accountant.
When you have a reliable accountant (like the Tax Expert team) to keep track of everything, you can spend your time growing your business while we deal with HMRC for you.
If you want to know more about how we can help you manage your day-to-day accounts and lower your tax bill, contacting us is easy.
Kind regards Ilyas