Record keeping for a Limited Company
Posted on 12th March 2022 at 17:51
Directors are responsible for keeping adequate accounting records - Companies Act 2006 s386-389
This means records that are sufficient to show and explain the company’s transactions; to disclose with reasonable accuracy, at any time, the financial position of the company at that time; and to enable the directors to ensure that the company’s annual accounts comply with relevant accounting requirements.
Accounting and other records will often need to be kept for longer than this to meet other legal requirements (for instance, requirements to keep tax records, typically for six years).
! Breach of these requirements is a criminal offence and can attract a prison sentence.
What are accounting records of company?
• all money received and spent by the company, including grants from COVID-19 support schemes
• details of assets owned by the company
• debts the company owes or is owed
• stock the company owns at the end of the financial year
• all goods bought and sold
• who you bought and sold them to and from (unless you run a retail business)
• You must also keep any other financial records, information and calculations you need to prepare and file your annual accounts and Company Tax Return. This includes records of:
• all money spent by the company, for example receipts, petty cash books, orders and delivery notes
• all money received by the company, for example invoices, contracts, sales books and till rolls
• any other relevant documents, for example bank statements and correspondence
! You can be fined £3,000 by HMRC or disqualified as a company director if you do not keep accounting records.
What limited company expenses can I claim?
Not sure if you're allowed to claim tax relief on your business expenses and costs?
Business Expenses Guide Online by FreeAgent: A-Z Guide for Limited Company Click Here.
Chart Accountancy can help.
Getting things right from the start. It is important that you understand your responsibilities as a director and seek support when needed. If you need help or advice, please get in touch with us today to find out how we can help you with your business accounts.
Tagged as: Record keeping
Share this post: