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When you set up a limited company, you have a legal obligation to keep certain company records. The length of time that you must retain these records varies, depending on the type of information you are documenting.
This post explains the different types of company records you need to keep, the statutory retention periods that apply, and how and where you must store these important records.
Limited company record-keeping requirements
As per the Companies Act 2006, the term ‘company records’ refers to “any register, index, accounting records, agreement, memorandum, minutes or other document required by the Companies Acts to be kept by a company, and any register kept by a company of its debenture holders.”
Keeping adequate records is an important discipline for directors and company secretaries. Aside from being a legal requirement, good record-keeping will help you to run your business more efficiently and effectively.
The statutory and regulatory requirements are set out in the Companies Act, tax legislation, and other regulations. To ensure that your company is compliant, you must keep:
- certain records about the company; and
- all financial and accounting records relating to the business
Some company records must be kept permanently, for as long as the business exists, and in some instances for a specified period of time thereafter.
However, the general rule for financial and accounting records is that they should be kept for a minimum period of 6 years from the end of the period to which they relate. But there are some exceptions.
Let’s take a detailed look at how long you need to keep different types of records for your limited company.
Records about your company
You must keep a number of important business documents and records about the company itself. The following should be retained for the lifetime of the company:
- company formation documents – i.e. the certificate of incorporation, memorandum of association, and articles of association
- statutory company registers – these include the register of members, register of directors, register of directors’ usual residential addresses, register of secretaries, and the PSC register
- documents relating to share transactions – e.g. returns of allotment of shares (form SH01), stock transfer forms (form J30), and copies of issued share certificates
You need to keep copies of company resolutions and minutes of meetings (board and general) for a period of at least 10 years from the date of the resolution or meeting.
Other important company records that you must retain include documents and information relating to:
- debentures, loans, and mortgages secured against company assets – keep for 6 years after the date of settlement
- indemnities, guarantees, and other contracts or agreements – keep for 6 years after the expiry of the contract
- purchase by the company of own its shares – retention period is 10 years from the date of purchase
- commercial leases – retention period is 12 years after the termination of the lease and any liabilities under the lease
- deeds of title and any other documents related to land or buildings that the company owns – keep permanently, or retain copies for a minimum period of 6 years after disposing of the property
- business insurance policies and claims – keep for 3 years after the lapse of the policy or date or any settlement
- employers’ liability insurance certificate – retain for 40 years from the date on which the insurance commences or is renewed
Depending on the size and needs of your company, you may find it beneficial to appoint an experienced company secretary to oversee these record-keeping requirements and ensure statutory compliance.
Company financial and accounting records
The vast majority of financial and accounting records relating to your company must be kept for at least 6 years after the end of the financial year or accounting period they relate to. For example, records for an accounting period ending on 31 March 2024 must be kept until 31 March 2030.
The financial and accounting records you need to retain include:
- all sums of money that the company spends (e.g. receipts, petty cash books, order forms, and delivery notes)
- all sums of money that the company receives (e.g. invoices contracts, sales ledgers, and till rolls)
- business bank account statements and correspondence
- details of company-owned assets
- liabilities of the company – i.e. debts that the company owes and/or is owed
- statements of stock that the company owns at the end of each financial year
- the statements of stocktakings you use to work out the stock figures
- all goods that the company buys and sells
- who you buy and sell these goods to and from (with the exception of goods that you sell by way of ordinary retail trade)
- dividend vouchers
- any other financial records, information, and calculations that you use to prepare and file annual accounts and Company Tax Returns and work out your Corporation Tax liability
It’s worth pointing out that the Companies Act 2006 (Section 388) stipulates that public limited companies (PLCs) must retain their accounting records for 6 years from the date on which they are made, whilst private limited companies need only retain their accounting records for 3 years from the date they are made.
However, tax law requires private companies to keep their records for a longer period. Therefore, the only records that private companies are legally permitted to discard at the 3-year point are the ones that they do not need for the purposes of completing their Company Tax Returns.
VAT records
If your company is registered for VAT and you use the VAT One Stop Shop (OSS) scheme or the VAT Mini One Stop Shop (MOSS) scheme, you need to retain your VAT records for at least 10 years. In all other cases, the standard 6-year retention period applies.
The point at which the VAT record retention period starts (whether it is 6 or 10 years) depends on the nature of the document:
- If the document records individual events (e.g. an invoice), it should be retained for 6 years from the date of issue.
- If the document records a summary (e.g. a balance sheet or trading account), it should be retained for 6 years from the date that it’s prepared.
- Documents that record a series of events (e.g. a ledger, daybook, or stock book that you keep in a bound book) should normally be retained for 6 years from the date of the final entry made in the bound book. Those maintained in a loose-leaf binder or on a card should be retained for 6 years from the date of the last entry in the loose-leaf record. If you keep your records in a digital format, you should treat them the same as paper records.
In limited circumstances, HMRC may grant a concession allowing a VAT-registered company to keep certain VAT records for a shorter period.
If you are an employer
The Income Tax (Pay As You Earn) Regulations 2003 require employers to keep all PAYE records for a period of at least 3 years from the end of the tax year to which they relate. For example, PAYE records for the tax year ending on 5 April 2024 must be kept until 5 April 2027.
In accordance with the PAYE Regulations, the documents and records you need to keep include:
- notices of tax codes
- P46 forms and copies of P45s
- calculations of employees’ income
- payments that you make to employees (wages, statutory payments, expenses)
- calculations of Income Tax and National Insurance contributions (NIC) deductions on wages
- payments that you make to HMRC (employees’ Income Tax and NIC deductions, and employer’s NIC)
- Student Loan and Postgraduate Loan deductions
- details of employee sickness and leave
- any taxable expenses and taxable benefits that you provide
- any information you are required to provide to HMRC on Forms P11D and P9D
- Payroll Giving Scheme documents
As an employer, you must also keep sufficient records to show that your company is meeting its National Minimum Wage and Living Wage obligations by paying workers at least the minimum wage. From 1 April 2021, the statutory retention period for such records is 6 years from the end of the pay reference period to which the records relate.
For auto-enrolment (workplace pensions), you must keep records for a minimum period of 6 years, with the exception of records of opt-outs, which you need only retain for 4 years.
How and where should I store my company records?
You can keep your company records on paper, electronically, or as part of a software program such as Xero, QuickBooks, or FreeAgent. Typically, digital record-keeping is the most secure and convenient method.
However, if you are a VAT-registered company, you are now legally required to keep digital VAT records, in accordance with HMRC’s Making Tax Digital (MTD) initiative. In due course, MTD will also apply to Corporation Tax.
Where you have a legal obligation to keep your company records for a specified period of time, you must store those records (or make them digitally available) at your registered office address or a Single Alternative Inspection Location (SAIL address) for the same period of time.
If you keep your records anywhere other than your registered office, you are required to notify Companies House.
If your company records are lost, stolen, or destroyed
You must do your best to replace or reconstruct any company records that are lost, stolen, or destroyed.
Certain records are easy to replace, such as company formation documents. You can view and download copies of these free of charge online via Companies House service.
If you are unable to replace any financial or accounting records, you must try to reconstruct duplicates. In such instances, you need to notify the relevant HMRC department(s) as soon as possible.
Record-keeping penalties
HMRC may impose penalties if your company records are found to be inadequate, or if you fail to keep them for the required statutory retention period. In serious cases, you can be fined up to £3,000 or disqualified as a company director.
Thanks for reading
If you have recently set up a company or you are planning to do so, start off on the right foot by keeping good company records from the get-go. This will make your life easier and ensure that your company is compliant.
It can be challenging to remember all of the different retention periods for the types of company records you need to keep, so you may wish to enlist the help of a company secretary and an accountant.
If you have any questions about this topic, please leave a comment below.
