Reminder to keep company records
A recent County Court case serves as an important reminder to comply with the requirements to preserve and maintain proper company accounting records. The case concerned a fast food takeaway company in Walsall. The sole director of the company was found to have failed to submit adequate accounting records to the tax authorities. This resulted in his disqualification from acting as a director for 7 years during which he cannot be involved, directly or indirectly, with the formation, promotion or management of a company without prior permission of the court.
Dave Elliott, Chief Investigator for the Insolvency Service, said:
'The company director's duty was to maintain and preserve his company’s financial records. If he had done this, he would have been able to provide information to the tax authorities and also the liquidator attempting to wind-up the company’s affairs. This should serve as a reminder to all directors to comply with their statutory duties.'
There is a requirement to hold company records for 6 years from the end of the last company financial year they relate to, or 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 6 years, like equipment or machinery
- you sent your Company Tax Return late
- HMRC has started a compliance check into your Company Tax Return.
If your company records have been lost, stolen or destroyed you must do your best to recreate them. You are also required to tell your Corporation Tax office straight away and include this information in your Company Tax Return.
Source: Department for Business, Energy & Industrial Strategy | 29-01-2020