If you are running your business using a limited company registered with Companies House in the United Kingdom, you must keep proper accounting records.
The UK company law states the accounting records you must keep include the following:
- The money you received from your customers. In this case, you would issue a sales invoice to your customer and keep a copy for every sale transaction.
- Your company’s expenses. In this instance, you would keep your suppliers’ invoices and also payment receipts.
- Keep a fixed assets register to record the details of assets owned by your company.
- Debts the company owes or is owed
- Record of your goods bought and sold during the financial year and balance at the financial year-end. Your accounting for stock must be clear of what methods you use to value your stock. FIFO or LIFO or Weighted average.
- Keep payroll records and register for PAYE if you have staff in your business.
- Register for VAT when your company’s sales exceed the VAT registration threshold.
- Other records you must keep include bank statements, petty cash books, contracts etc important correspondences from HMRC and Companies House.
HM Revenues and Customs could fine you if you do not keep proper accounting records. Additionally, You may be disqualified as a company director in the UK. You must keep your accounting records for at least 6 years.