Company and Accounting Records
Company and Accounting records:
Every limited company must keep accurate and up-to-date company and accounting records.
These records help you manage your business, prepare annual accounts and Corporation Tax returns, and demonstrate that your company is meeting its legal and tax obligations.
You can appoint a professional, such as an accountant or tax adviser, to help maintain your records and deal with your tax affairs.
HM Revenue and Customs (HMRC) may carry out a compliance check to make sure your company is keeping appropriate records and paying the correct amount of tax.
What Company Records Must I Keep?
You must keep information about the company itself, including records of:
- Directors, shareholders and company secretaries.
- The results of shareholder votes and resolutions.
- Details of people with significant control (PSC).
- Promises by the company to repay loans at a specific date in the future, such as debentures.
- Details of indemnities provided by the company.
- Transactions involving the company's own shares.
- Loans or mortgages secured against the company's assets.
You must also keep the company’s constitutional and statutory information required under company law.
What Accounting Records Must I Keep?
Your company must keep sufficient financial records to prepare accurate annual accounts and calculate its Corporation Tax liability. This includes records of:
- All money spent by the company.
- All money received by the company.
- Sales invoices.
- Purchase invoices.
- Receipts.
- Petty cash records.
- Orders and delivery notes.
- Bank statements.
- Payroll records.
- Dividend records.
- Director's loan transactions.
- Details of company assets and liabilities.
- VAT records, where applicable.
- Any other documents needed to support the company's accounts and tax calculations.
You should also keep relevant correspondence and supporting documents that help explain the company’s financial transactions. HMRC states that you can be fined up to £3,000 or disqualified as a company director if adequate accounting records are not kept.
- How Long Do I Need to Keep Company Records?
As a general rule, you must keep accounting records for 6 years from the end of the relevant financial year.
You may need to keep records for longer if:
- They relate to a transaction covering more than one accounting period
- The company purchased an asset that it expects to last for more than 6 years
- Your Company Tax Return was submitted late
- HMRC has started a compliance check into your Company Tax Return
You should not destroy records simply because six years have passed if another legal or tax requirement means they need to be retained for longer.
If your records are lost, stolen or destroyed and If you cannot replace your records after they were lost, stolen or destroyed you must:
What If My Company Records Are Lost or Destroyed?
If your company records are lost, stolen or destroyed and cannot be replaced, you should:
- Do your best to recreate the records
- Contact your Corporation Tax office as soon as possible
- Explain the circumstances to HMRC
- Include the relevant information in your Company Tax Return where required
It is important to take reasonable steps to reconstruct missing information so that your company’s tax and accounting records remain as accurate as possible.
- What Happens If I Change My Company's Registered Office Address?
You must tell Companies House if your company’s registered office address changes.
The new registered office must be in the same part of the UK where your company was incorporated.
For example:
- A company registered in England and Wales must have its registered office in England or Wales
- A company registered in Scotland must have its registered office in Scotland
- A company registered in Northern Ireland must have its registered office in Northern Ireland
Your new address does not officially take effect until Companies House registers the change.
The registered office is a public company address, so you should make sure it is an appropriate address for receiving official documents.
For example, if your company was registered in England and Wales, the new registered office address must be in England or Wales. Your address will not officially change until Companies House has registered it. You must tell HMRC if:
- What Changes Must I Report to Companies House?
You must keep Companies House informed when certain company details change.
This can include changes to:
- Directors
- Directors’ personal details
- Company secretaries
- People with Significant Control (PSC)
- Registered office address
- Company name
- Share structure
- Accounting reference date
- Mortgages or charges
- Articles of association
Different changes have different reporting deadlines.
For example:
- Changes to directors or their personal details generally need to be reported within 14 days
- Changes to PSC information generally need to be reported within 14 days
- Changes to the address where company records are kept must generally be reported within 14 days
- New shares issued must generally be reported within one month
- Other company changes can have different deadlines depending on the type of change
You should check the specific deadline for the change you are making rather than assuming every change has the same deadline.
You must tell Companies House within a month if you issue more shares in your company.
What is a Confirmation Statement?
A Confirmation Statement is an annual filing used to confirm that the information Companies House holds about your company is correct and up to date.
Every company, including dormant and non-trading companies, must file at least one Confirmation Statement every 12 months.
You must file a Confirmation Statement even if nothing has changed during the review period.
You must also confirm that the company’s intended future activities are lawful.
Note: Companies House may issue a financial penalty and your company may be struck off the Companies House register if you do not file your confirmation statement.
- When Do I Need to File My Confirmation Statement?
You must review your company information and file at least one Confirmation Statement every 12 months.
Your review period normally runs for 12 months from:
- The confirmation statement date on your previous statement, or
- The incorporation date for your first Confirmation Statement
You can file your Confirmation Statement early.
You can also check your company’s filing deadline through the Companies House company information service.
- What About My Registered Email Address?
A limited company must provide Companies House with a registered email address.
Companies House uses this address to communicate with the company.
The registered email address:
- Must be kept up to date.
- Should be monitored regularly.
- Is not published on the public register.
- What Is a Confirmation Statement?
A Confirmation Statement is an annual filing used to confirm that the information Companies House holds about your company is correct and up to date.
Every company, including dormant and non-trading companies, must file at least one Confirmation Statement every 12 months.
You must file a Confirmation Statement even if nothing has changed during the review period.
You must also confirm that the company’s intended future activities are lawful.
When Do I Need to File My Confirmation Statement?
You must review your company information and file at least one Confirmation Statement every 12 months.
Your review period normally runs for 12 months from:
- The confirmation statement date on your previous statement, or
- The incorporation date for your first Confirmation Statement
You can file your Confirmation Statement early.
You can also check your company’s filing deadline through the Companies House company information service.
What Information Should I Check?
Before submitting your Confirmation Statement, you should check that the information held by Companies House is correct. This includes:
- Registered office address.
- Directors.
- Company secretary, if applicable.
- Address where company records are kept.
- Shareholder information.
- Statement of capital.
- SIC code.
- People with Significant Control (PSC)
- Registered email address.
- Director identity verification information, where applicable.
If information is incorrect or out of date, the relevant change should be reported to Companies House.
What Can I Update With a Confirmation Statement?
Depending on your circumstances, you can use the Confirmation Statement process to update information such as:
- SIC code.
- Statement of capital.
- Trading status of shares.
- Shareholder information.
- Certain PSC-related information.
- Registered email address, where applicable.
Other company changes must be reported separately using the appropriate Companies House service or form.
Author...
Farhad Kabir
MSc AFA MIPA FCCA
Partner
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