Why businesses should keep accurate records
Keeping adequate business records plays a key role in effectively monitoring the performance of your business, as well as ensuring that you comply with the requirements of HM Revenue & Customs (HMRC).
What are ‘adequate records’?
Legislation requires businesses to keep all such records as may be required for the purposes of making a complete and accurate tax return. While the exact records required will depend on the nature of your business, at the very minimum it will entail keeping a record of all money travelling ‘in’ and ‘out’ of the business. All businesses will need to keep records of sales and takings, purchases and expenses including wage roll and payments to contractors plus copies of agreements/contracts with employees and freelancers if requested.
How long do I keep them for?
Legislation and HMRC’s advice on how long you need to keep business records for varies depending on whether they are for VAT or other tax purposes.
As a general rule of thumb though, work on the basis that you need to keep records for six years. This is as far back as HMRC will generally go unless they suspect some deliberate wrongdoing has taken place.
For more information please contact the team.