Limited companies in the UK must keep certain records, not only because it’s good business practice, but to ensure the company remains compliant with the various stringent recordkeeping, accounting and reporting rules set by HMRC and Companies House. Certain company records must also be accessible for any members of the public to view should they submit a request.
But out of all the various business records, registers and documents that your limited company deals with every day, which ones must you keep? Here we explain what records a limited company must keep, where you should keep them and for how long.
Which records a limited company must keep
As the owner of a limited company, the records you should focus on keeping are:
- Register of shareholders or guarantors
- Company directors and secretaries register
- Directors’ service contracts
- People with Significant Control Register
- Minutes and outcomes of meetings
- Directors’ indemnities
- Contracts concerning purchasing own shares
- Records relating to the purchase or redemption of shares
- Register of debenture holders
- Register of mortgages or charges
As a limited company, you must also retain copies of the certificate of incorporation, all share certificates and the legal statement signed by all shareholders agreeing to form the limited company.
Accounting records that a limited company should keep include:
- All goods and services purchased or sold by the company
- All types of income and expenditure
- All company assets, credits and liabilities
- Stock takings that are used to calculate the company’s inventory figures
- Records of all stock and assets the company owns by the end of the accounting period
- Details of whom the company bought goods and services from or sold them to (exclusive of retail sales)
Your company’s business bank account statements and financial records are used to prepare your annual accounts, prepare Company Tax Returns and calculate corporate tax liabilities for each tax accounting period.
If your limited company is VAT registered, you must keep business and VAT records that can support every VAT transaction. This information is also important when it comes to completing your VAT returns.
If you have registered the company as an employer, you must therefore keep up-to-date PAYE records. Your PAYE records will enable you to calculate the correct amount of National Insurance contributions and PAYE to pay, and demonstrate that your employees are getting the correct amount of statutory pay. PAYE records generated by your limited company must be kept for three years and include:
- Your employees’ wages
- How much you paid HMRC
- Any deductions in wages and the details of why they were made
- Taxable benefits and expenses
- Tax code notices
- Annual leave records
- Absence records
- Sickness records
- Payroll Giving Scheme information
Accounting and business records are typically electronic or hard copies in a loose-leaf or bound book.
Why it’s important to keep hold of your tax records
While you must comply with your legal obligations as a limited company to securely store your records and registers, there are many reasons why you should keep hold of them. For example, if HMRC wants to inspect your business or tax records, you’ll have to produce all the relevant accounting records for the HMRC inspector. There may also be a time in the future when you need to double-check a transaction, and you don’t have access to online copies.
How long must a limited company keep records?
You must keep all of your limited company’s records for the entire lifespan of the company. However, records of accounts are typically kept by businesses for a minimum of six years from the date that the accounting period or fiscal year ends. You should keep all company resolutions, notes and transcripts of meetings for a minimum of 10 years from when the meeting that the records relate to took place. Most of these records can be stored digitally rather than being kept in their original hard copy format. But certain records must be stored in their original hard copy format, such as:
- Bank interest certificates
- Construction Industry Scheme (CIS) vouchers
- Dividend vouchers
If your limited company fails to follow these requirements, it could face a penalty from HMRC of up to £3,000.
Where should your limited company records be kept?
While it makes sense that you should know which records your need to keep on behalf of your company and how long for, it’s also important you know where you should be storing these all-important records and registers.
Companies House presumes that all of your limited company’s records and registers are kept safely at your company’s registered address unless you tell them otherwise. If you cannot keep records at your registered address or make them available for inspection at that address when required, there is an alternative. Instead, you can choose to store your limited company records, registers and documents at a Single Alternative Inspection Location (SAIL).
If your company would prefer to use a SAIL address to store your records, you must advise HMRC and Companies House and tell them precisely which records you have stored there. You will also have to confirm to Companies House where you keep your company records whenever you file with them.
What is a registered address?
All limited companies must have a registered address. This address is where all official correspondence from HMRC and Companies House is sent. It must be an actual postal address and not be a PO Box number. Your limited company’s address will be available to view on the public record and displayed on your website and company stationery. You can choose your registered address as your trading or home address or purchase a registered office address service from Uniwide Formations.
If your registered address needs to change after setting up your limited company, the address must remain within the same jurisdiction in which you registered the company. You must also inform Companies House of the change using the online customer portal or by submitting form AD01.
How should you store the minutes of meetings?
Limited companies must keep all minutes of meetings — including general meetings and board meetings — at Companies House. This can prove to be useful if there are any disputes at a later stage. These documents provide an accurate record of all matters discussed and agreed on.
What should you do if your limited company records are lost, destroyed or stolen?
If something happens to your records, such as they get destroyed, lost or stolen, and you cannot replace them, you must inform HMRC immediately. If you can, try to recreate the records as best you can and include the information in your next company Tax Return. You are permitted to use estimated or provisional figures if you are unable to recreate the records. You must declare that you are doing this in the ‘Any other information’ box on your Tax Return. In this instance, estimated means you cannot confirm the figures, while provisional means you can get the necessary paperwork to confirm the figures you’ve provided later on.
Your company may be required to pay penalties and interest if the figures you provide turn out to be incorrect, and you’ve not paid enough tax as a result.
How are limited company records inspected, and who by?
All of your accounting and business records should be available at your registered address for inspection by Companies House, HMRC and the public. These records should be readily available between 9am and 3pm every business day and can be viewed for up to two hours at a time. If a member of the public requests to view the records, they must have a proper purpose for doing so. Their request should contain:
- Details of the organisation, business or individual placing the request
- The reason for the inspection
- How they will use the information and who they will give it to
Anyone requesting to view your limited company records and registers must give you 10 working days unless the date of inspection falls within the period of notice required for members’ written resolutions or general meetings. In these circumstances, just two business days’ notice is necessary. A company secretary or director should respond to the request within five working days or risk a fine.
You can also make some if not all of these company records available to inspect at a SAIL address if you’d prefer. However, you must update Companies House of this new address and what records you are storing there.
While it’s generally good business practice to keep limited company records in a safe place if you ever need to refer to them, it’s also a legal requirement. Make storing your limited company records a business priority for both your peace of mind and to save you hassle in the future if Companies House or HMRC request to inspect them.