As a small business, it is important to understand which documents need to be kept and which can be shredded. Data protection legislation demands both secure document storage and secure destruction of confidential information (see our previous blog on confidential waste shredding).
Data protection requirements aside, businesses also possess information that needs to be stored medium to long term, especially for accounting purposes. If you don’t keep accounting records, you can be fined up to £3,000 by HM Revenue and Customs (HMRC) or disqualified as a company director. Therefore, it is worthwhile investing in a robust storage and retrieval system so that any queries can be quickly and easily dealt with.
To meet HMRC requirements * (and assuming your business is a limited company) you need to keep:
- Records about the company itself
- Financial and accounting records.
Records about your company
You must store details of:
- Directors, shareholders and company secretaries
- The results of any shareholder votes and resolutions
- Promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to
- Promises the company makes for payments if something goes wrong and it is the company’s fault (‘indemnities’)
- Transactions when someone buys shares in the company
- Loans or mortgages secured against the company’s assets.
Financial and accounting records
You must keep accounting records that include:
- All money received and spent by the company
- Details of assets owned by the company
- Debts the company owes or is owed
- Stock the company owns at the end of the financial year
- The stocktakings you used to work out the stock figure
- All goods bought and sold
- Who you bought and sold them to and from (unless you run a retail business).
According to HMRC, businesses must also keep any other financial records, information and calculations you need to complete your company tax return. This includes records of all money:
- Spent by the company, e.g. receipts, petty cash books, orders and delivery notes
- Received by the company, e.g. invoices, contracts, sales books and till rolls.
You must also keep any other relevant documents such as bank statements and correspondence.
How long must you keep business records for?
You must normally keep records for at least six years from the end of the last company financial year they relate to.
You may need to keep records longer if:
- They show a transaction that covers more than one of the company’s accounting periods
- The company has bought something that it expects to last more than six years, like equipment or machinery
- You sent your Company Tax Return late
- HMRC have started a compliance check into your Company Tax Return.
Requirements can vary depending on individual circumstances so visit www.gov.uk to check any additional regulations your business might need to meet.
Once records reach their expiry date most businesses will want to make sure that they are securely destroyed and that they receive a Certificate of Destruction for their records. Choosing a shredding company that meets BSEN 15713 standards can ensure this and offer peace of mind that all confidential material is professionally handled from collection to destruction.
For more information about how Yeates’ can help with document storage visit https://www.yeates.co.uk/storage-bristol/secure-document-storage/
For more information about Yeates’ shredding services visit https://www.yeates.co.uk/shredding/ alternatively call us on 01275 872251.
*Information source www.gov.uk.