Accounting Records
The annual accounts, also known as statutory accounts, encompass the following: balance sheet, profit and loss, notes on the accounts, and the director’s report. Depending on the size of the company, an auditor’s report might have to be included. These accounting records must be sent to Companies House and HM Revenue and Customs.
The accounting records must include:
- All money that has come in and come out of the company. Remember to keep the records of these transactions (invoices, receipts, etc.) The money coming in and out can be from services as well as goods sold and goods bought.
- Debt (bank loans, private investors)
- Any other assets the company owns (patents, equipment, land)
- Other documents that are relevant include bank statements and mail.
One of the consequences of not keeping accurate financial records is a fine of up to £3000 by HMRC. In the case that these transactions are stolen or lost, they must be recreated or reported to HMRC immediately.
It is necessary to keep records for at least 6 years unless components of your financial records last more than 6 years. These components can be equipment and a contract that will last or has lasted more than six years.