Record keeping for limited companies
If you are a limited company, then you will need to keep specific company and accounting records. Here is what information you need to maintain and submit:
What you are required to keep
You are required to keep:
- records about the company itself
- financial and accounting records
You can hire a professional, such as an accountant, to help with your tax. However, if you are the Director of a limited company, then it is essential to note that you are still legally responsible for your company’s records, accounts and performance.
HM Revenue and Customs (HMRC) may also check your records to make sure you’re paying the right amount of tax.
Records about the company
You must keep details of:
- directors, shareholders and company secretaries
- the results of any shareholder votes and resolutions
- promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to
- promises the company makes for payments if something goes wrong and it’s the company’s fault (‘indemnities’)
- transactions when someone buys shares in the company
- loans or mortgages secured against the company’s assets
If for any reason you keep the company records at somewhere other than the company’s registered office address, then you are required to inform Companies House.
Register of ‘people with significant control’
You must also keep a register of ‘people with significant control’ (PSC). Your PSC register must include details of anyone who:
- has more than 25% shares or voting rights in your company
- can appoint or remove a majority of directors
- can influence or control your company or trust
You still need to keep a record if there are no people with significant control. Read more guidance on keeping a PSC register on the gov.uk website if your company’s ownership and control is not simple.
You must keep accounting records that include:
- all money received and spent by the company
- 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
- the stocktakings you used to work out the stock figure
- all goods bought and sold
- who you bought and sold them to and from (unless you run a retail business)
You are also required to 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
It is important to note that you can be fined £3,000 by HMRC or disqualified as a company director if you do not keep accounting records. Find out more about company director disqualification on the gov.uk website.
How long to keep records
Records must be kept for 6 years from the end of the last company financial year they relate to, or longer if:
- they show a transaction that covers more than one of the company’s accounting periods
- the company has bought something that it expects to last more than 6 years, like equipment or machinery
- you sent your Company Tax Return late
- HMRC has started a compliance check into your Company Tax Return
Lost, stolen or destroyed records
If your records are lost, stolen or destroyed, and you cannot replace them, you must:
- do your best to recreate them
- tell your Corporation Tax office straight away
- include this information in your Company Tax Return
Confirmation statement (annual return)
Every year you need to check that the information Companies House has about your company is correct. This is called a confirmation statement, it was also previously known as an annual return.
Checking your company’s details
Make sure to check the following:
- the details of your registered office, directors, secretary and the address where you keep your records
- your statement of capital and shareholder information if your company has shares
- your SIC code (the number that identifies what your company does)
- your register of ‘people with significant control’ (PSC)
You will receive an email alert or a reminder letter to your company’s registered office when your confirmation statement is due.
The due date is usually a year after either:
- the date your company incorporated
- the date you filed your last annual return or confirmation statement
You can file your confirmation statement up to 14 days after the due date.
You can be fined up to £5,000, and your company may be struck off if you do not send your confirmation statement. Find out more about submitting a Confirmation Statement on the gov.uk website.
If you found this information useful, you may also want to check out the following:
- Business structures in the UK
- Reducing your risk of corporate tax evasion
- Director responsibilities for limited companies
MRA help individuals, businesses and families achieve the best quality of life they can with the resources they have. MRA specialise in corporate solutions, cash-flow analysis, taxation, debt management, savings and investments, lifestyle planning and much more.
Business Consultants based in East Sussex we service clients across the South East, Sussex and Kent, including smaller towns such as Ashford, Battle, Bexhill, Bodiam, Brighton & Hove, Cranbrook, Crowborough, Eastbourne, Hailsham, Hastings, Heathfield, Herstmonceux, Lewes, Mayfield, Newhaven, Rye, Seaford, Sevenoaks, Tenterden, Tonbridge and Tunbridge Wells.