How long to keep accounting records

UK companies must keep their accounting records for a number of years. How long to keep accounting records is dependent on whether you are a private company or a public limited company (PLC).

In brief, accounting records include your company accounts, company tax return, VAT returns, Payroll records and other financial records.

Section 388 (a) and (b) of the Companies Act 2006 made this clear. A private limited company must keep their accounting records for 3 years. Whereas, a PLC must keep their accounting records for 6 years. The keeping record date starts from your last company accounting year-end date.

In some cases, your company may require to keep financial records for more than 6 years. For examples,

  • To show a transaction that covers two accounting periods.
  • Your company’s equipment or machinery has an economic useful life span longer than 6 years.
  • You deliver your company tax return to HMRC late.
  • HMRC started a compliance check into your company tax return.

Where to keep your accounting records?

Generally, you must keep your company records at your registered office address in the UK. If for any reasons, you would like to store your records somewhere else, you must notify Companies House. The somewhere else, in the UK company law, it is called the Single Alternative Inspection Location (SAIL).

Usually, you would keep your financial records with your company registers at the same place. Your company registers would include the register of directors, copies of your confirmation statement file with Companies House and so on.

For this purpose, both your registered office address and your SAIL address must not be a P O BOX address. They must be a physical location.

If you have any questions about your company accounts, contact Companies House. For any questions relating to your company tax returns, contact HMRC. You may also speak with our London accountants.

Register of charges

A limited company must keep and maintain a Register of charges as required by law. You must make your company register available for inspection when a request to inspect the register has been made.

Information to keep in Register of Charges

The information and documents you must keep in your company register include:

  • All charges specifically affecting your company’s property.
  • All floating charges on the whole or part of your company’s assets or undertaking.
  • A description of your company’s assets charged
  • The amount of charge
  • The name of the person entitled to the charge
  • Copies of any instruments giving a mortgage or other charge over your company.

Register your charges with Companies House

Your company must register a charge or a mortgage within 21 days with Companies House. Otherwise, your company commit an offence thus you are liable to a fine.

Creditors and shareholders

The purpose of your register of charges is to give your unsecured creditors and other person giving credit to your company can see what part of your company’s property is already charged.

For this reason, your shareholders and creditors are entitled to inspect your register free of charge. Whereas, any other person may inspect your register for a fee prescribed.

Location of your register

Typically, your register of charges is kept at your company’s registered office address. However, if you keep your register somewhere else then inform Companies House. Thus, you submit the Single Alternative Inspection Location (SAIL) form specifying the location of your Register.

Register of directors home address

UK Company must keep and maintain the Register of directors home address. This register is different from that of the Register of directors.

The information you would need to keep and maintain include:

  • The usual residential address of each of your company’s directors.
  • If your director’s usual residential address is the same as his service address, as stated in your company’s register of directors then your register of directors’ home addresses need only contain an entry to that effect. However, this does not apply if his service address is stated to be your company’s registered office.

You must keep your directors’ home addresses private and confidential. Your company can only use this information to contact your director on matters related to Companies House. Unless your director has given his/her consent to use his/her residential address for other purposes or if so required by the court.

Companies House would not publish your director’s home address on their website or be made available for public inspection. If your director is using his home address as the registered office address, Companies House would not make reference to that fact. In other words, people would not know that you are using your home address as your registered office address or service address unless you tell them.

However, Companies House will provide your directors’ home addresses to Credit Reference Agencies and Specified Public Authorities.

Your confirmation statement

You must notify Companies House using the Form CH01 within 14 days of any changes to your director’s home address.

If you are filing your CH01 at the same time with your confirmation statement, check that Companies House already accepted your CH01 before filing your confirmation statement.

For instance, you are to submit your CH01 and CS01 (Confirmation statement) at the same time on paper form. Companies House rejected your CH01 because you put a PO Box address as the director’s home address. Of course your CH01 would be rejected. Your director cannot be possibly live in a letter box. Let say you did not know this. To save time, you send in CH01 and CS01 at the same time. Both documents would be rejected by Companies House.

The best way forward is to use the Companies House webfiling service. For this purpose, you would require your authentication code. Usually, Companies House would acknowledged acceptance of filing by email if you submit your CS01 and CH01 documents online.

Failed to maintain Register of directors home address

For limited company with registered office in England and Wales

Your company and all of your directors and company secretary is guilty of an offence under section 165 of the Companies Act 2006. This includes a shadow director. Consequently you all are liable on summary conviction to a fine not exceeding level 5 on the standard scale. In addition, for continued contravention, a daily default fine not exceeding one tenth of the greater of £5,000 or level 4 on the standard scale.

For limited company with registered office in Scotland and Northern Ireland

Your company and all of your directors and company secretary is guilty of an offence under section 165 of the Companies Act 2006. This includes a shadow director. Therefore, you are all liable on summary conviction to a fine not exceeding level 5 on the standard scale. And, for continued contravention, a daily default fine not exceeding one tenth of level 5 on the standard scale.

This section applies only to directors who are individuals, not the corporate directors.

%d bloggers like this: