Business Record Retention
Discussion
Afternoon all,
I am doing some research on what business records must be kept by law, and in which format (hard copy / electronic or both) and for what period of time.
I'had a peruse around and can find plenty relating to what needs to be kept for tax reasons, but is there a requirement to keep things like invoices, purchase orders etc, and if so what are the rules?
Any help is greatly appreciated,
David.
I am doing some research on what business records must be kept by law, and in which format (hard copy / electronic or both) and for what period of time.
I'had a peruse around and can find plenty relating to what needs to be kept for tax reasons, but is there a requirement to keep things like invoices, purchase orders etc, and if so what are the rules?
Any help is greatly appreciated,
David.
Davie_GLA said:
Afternoon all,
I am doing some research on what business records must be kept by law, and in which format (hard copy / electronic or both) and for what period of time.
I'had a peruse around and can find plenty relating to what needs to be kept for tax reasons, but is there a requirement to keep things like invoices, purchase orders etc, and if so what are the rules?
Any help is greatly appreciated,
David.
If you are running a business (whether as an individual, partnership or limited company), the underlying records such as invoices, bank statements, till rolls, summaries (manual or computerised) all form the basisi for the annual accounts. The accounts, in turn, form the basis for the tax, VAT and PAYE (if appropriate) returns and payments for the business. Therefore, whatever the tax legislation says about retaining records will also relate to these busines records too.I am doing some research on what business records must be kept by law, and in which format (hard copy / electronic or both) and for what period of time.
I'had a peruse around and can find plenty relating to what needs to be kept for tax reasons, but is there a requirement to keep things like invoices, purchase orders etc, and if so what are the rules?
Any help is greatly appreciated,
David.
These days it is acceptable to keep the records in either paper or electronic formats - as long as the data can be reviewed and examined in full if necessary within the retention of record time periods.
Davie_GLA said:
Thanks Eric, i was under the impression that all records MUST be kept in paper format, but i was thinking that so they couldn't be altered, but i guess the use of PDFs or other locked document types could be used.
David.
Yes - pdf documents are allowed.David.
And don't believe paper records can't be altered
Try looking up Business Link. They are quite good at giving details of this aspect of business.
Perhaps the Federeation of Small Business (FSB) might have similar information.
Or even checking out the various books on the subject - there are plenty out there covering what small businesses need to do.
HMRC are a tax agency so will quote the law regarding the tax requirements irrespective as to whether the taxpayer is running a business or not.
Perhaps the Federeation of Small Business (FSB) might have similar information.
Or even checking out the various books on the subject - there are plenty out there covering what small businesses need to do.
HMRC are a tax agency so will quote the law regarding the tax requirements irrespective as to whether the taxpayer is running a business or not.
I think it's called "research" .
An example of the impact of these time limits on a sole trader-
A sole trader business has a financial year end of 31 July 2010. The profits from that year's trade will be taxed in the tax year 2010/11.
The underlying records need to be retained for six year after the end of the due date for submitting the 2010/11 Self Assessment tax return i.e. 31 January 2012 plus 6 years = 31 January 2018.
Therefore, the sole trader needs to keep all his book-keeping records that start on 1 August 2009 right through to 31 January 2018.
Those records can be in paper or paper substitute electronic form.
.An example of the impact of these time limits on a sole trader-
A sole trader business has a financial year end of 31 July 2010. The profits from that year's trade will be taxed in the tax year 2010/11.
The underlying records need to be retained for six year after the end of the due date for submitting the 2010/11 Self Assessment tax return i.e. 31 January 2012 plus 6 years = 31 January 2018.
Therefore, the sole trader needs to keep all his book-keeping records that start on 1 August 2009 right through to 31 January 2018.
Those records can be in paper or paper substitute electronic form.
Edited by Eric Mc on Monday 26th July 15:49
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