Finance and Accounting Records UK

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Description of Business Function

The function of managing the financial resources and transactions of the organisation.

Basis of Retention and Disposition

The keeping of financial records is usually based upon the statutory 6 year period to retain tax and accounting records under the Companies Act, VAT Act and Finance Act. To this is added an additional year of 'safety' period to ensure that records are kept for the minimum period beyond the last date beyond which HMRC can launch an enquiry under the Finance Act 2007 - i.e. 12 months after the date of delivery or statutory filing date.

Please note that in Jersey, accounting records must be kept for 10 years.

At the end of this period records could be eligible for disposal unless there is an ongoing Legal or Tax Hold.

However, certain records will need to be retained indefinitely where they evidence permissions, provide standing data or to maintain an accurate financial picture over time.

Retention Rules Per Record Type

Please use the following formatting for each row within the table below:

|-

| Name of record type || Retention period including any trigger || The legal citations and/or other rationale for determining this rule


Record Type Minimum Retention Period Rationale
Accounts Payable / Purchase Invoicing Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additionnal year 'safety' period in case of HMRC enquiry
Accounts Receivable / Sales Invoicing Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additional year 'safety' period in case of HMRC enquiry
Banking – Bank Account Management Account Closure + 7 years Triggered by account closure to align to limitation period for ordinary contract, with 7 rather than 6 years derived from the standard retention rule for Finance and Accounting records
Banking – Instructions and Payments Life of Instruction + 6 years Triggered by life of instruction to align to limitation period for ordinary contract, with 7 rather than 6 years derived from the standard retention rule for Finance and Accounting records
Banking – Reconciliation and Balance Management Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additional year 'safety' period in case of HMRC enquiry
Capital Expenditure Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additional year 'safety' period in case of HMRC enquiry
Charitable and Political Donations 6 years from end of tax tear in which last payment was made

Correspondence concerning refused donations kept for 3 months

Tax and limitation; retain up to 12 years if any payments are still outstanding or there is any dispute regarding the deed (Limitation Act 1980, c. 58, s. 8)

Best practice for correspondence

Cost Centre Accounting Financial Year Closed + 3 years Business need and internal audit purposes
Credit Control – Insolvency Case closed + 15 years Standard rule for Legal Affairs’ records
Credit Control – Reconciliation Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additional year 'safety' period in case of HMRC enquiry
Expenses Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additional year 'safety' period in case of HMRC enquiry
Fixed Asset Management – Non Property Assets Financial Year Closed + 7 years As tax records, therefore as per the standard retention rule for Finance and Accounting records
Fixed Asset Management – Property Assets Life of Property + 15 years (20 years in Scotland) Aligned to standard rule for Estates Management records
Logistics (Goods In / Out) Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additional year 'safety' period in case of HMRC enquiry
Management Accounts and Budget Financial Year Closed + 3 years Business need and internal audit purposes
Payroll and Leave Financial Year Closed + 7 years Based on requirements of Finance Act 1998 Schedule 18 Part III and Income Tax (Pay as You Earn) Regulations 2003 reg 97

Exceeds 3 year requirements of Statutory Sick Pay (General) Regulations 1982 reg. 13 + Statutory Maternity Pay (General) Regulations 1986 reg. 26 + Ordinary Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002, reg. 9 Exceeds 3 years after the end of the pay reference period following the one that the records cover for National Minimum Wage (NB civil case can be brought before a court for up to six years after an alleged failure to pay the NMW) - National Minimum Wage Act 1998

Payroll – Staff Loan Repayment Loan Repayment + 6 years Evidence and limitation of any legal action
Report and Accounts Indefinite

Keep working papers and reporting support for 6 years from publication of accounts

Company policy for evidence and business need

Companies Act 2006 for working papers

Standing Data, Ledgers and Certificates Indefinite Company policy for evidence and business need
Tax (Corporation, VAT) Financial Year Closed + 7 years As per the standard retention rule for Finance and Accounting records, 6 years statutory under the Companies Act, VAT Act and Finance Act, with additional year 'safety' period in case of HMRC enquiry

Citations

Please also see Accounting records retention and disposal schedule published by The National Archives http://www.nationalarchives.gov.uk/documents/information-management/sched_accounting.pdf

Companies Act 2006 s.388, Accounting Records: "Accounting records that a company is required by section 386 [see Note 3] to keep must be preserved by it...in the case of a public company, for six years from the date on which they are made"

Value Added Tax Act 1994 Schedule 11 s. 6, Administration, collection and enforcement - Duty to keep records: "The Commissioners may require any records kept in pursuance of this paragraph to be preserved for such period not exceeding 6 years as they may require"

Finance Act 1998 Schedule 18 Part III, Duty to keep and preserve records: "The records must be preserved for six years from the end of the period for which the company may be required to deliver a company tax return...[or later if] any enquiry into the return is completed, or...if there is no enquiry, the Inland Revenue no longer have power to enquire into the return"

Income Tax (Pay as You Earn) Regulations 2003, Chapter 3 PAYE Records, Inspection of employer’s PAYE records, reg 97 "an employer must keep, for not less than 3 years after the end of the tax year to which they relate, all PAYE records which are not required to be sent to the Inland Revenue by other provisions of these Regulations."

Statutory Sick Pay (General) Regulations 1982 reg. 13, Records to be maintained by employers, "Every employer shall maintain for 3 years after the end of each tax year a record, in relation to each employee of his, of [etc.]"

Statutory Maternity Pay (General) Regulations 1986 reg. 26, Records to be maintained by employers, "Every employer shall maintain for 3 years after the end of the tax year in which the maternity pay period ends a record in relation to any woman who is or was an employee of his of [etc.]"

Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002, reg. 9, Records to be maintained by employers, "Every employer shall maintain for three years after the end of a tax year in which he made payments of statutory paternity pay or statutory adoption pay to any employee of his a record of [etc.]"