How do I keep my business records?
Have you just started in business? Are you at the stage of wondering what bookkeeping records you should keep?
The law states: “That if you have to send H M Revenue and Customs a tax return you must keep all records and documents you need to complete the return. If you don’t have adequate records or you do not keep them for long enough, you may have to pay penalties”. These penalties can be up to £3,000, so it is worth getting it right on day one.
So what are adequate records? How long should you keep them? This depends on the legal status of your business:
- Sole trader/Partnership – You must keep a record of all business income and expenses and they should be kept for 5 years after the filing deadline of the return.
- Limited Companies – You must keep a record of the company assets, liabilities, income and expenditure. The records must be complete and up to date and must be kept for at least 6 years following the end of an accounting period.
The above are the pure basics for the record keeping, there are lots of other factors that will affect the records you keep. As well as keeping adequate records you need to keep all original documents, however, these can be scanned and kept electronically.
If you have any queries at all on how to keep your records and/or how to keep your accountant’s bill down by keeping them in an orderly fashion, then please do contact us for a free initial consultation.