When you’re beginning a company, you might feel clueless about what records to keep. Record-keeping can seem like a daunting task, especially when you’re tackling a start-up. Simply being organised and making a note of what you’ll need can make life less stressful when tax return season rolls around.  

Rather than waiting for the time to come when you realise that paper statement you shredded was vital for your annual return, we’ve created a list of all the business records you will need as a sole trader and as a limited company.

Sole trader

If you’re setting up as a sole trader there’s a number of things you need to remember in order to keep your records up to date. You must keep records for a minimum of five years from 31 January following the tax year that the tax return relates to. These include records of the following:

• Sales and income
• Business expenses
• VAT records (if registered for VAT)
• PAYE records (if an employer)
• Records on your personal income

You’ll also need to keep proof of a few things if you want to keep on top of your business expenses and submit a complete and accurate self-assessment. These are:

• Receipts for goods and stock
• Bank statements and chequebook stubs
• Sales invoices, till rolls and bank slips

If you’re struggling to keep tabs on your business expenses and sales and income, why not make the most of our free bookkeeping software, Pandle? You can learn more about it here.

Limited company

As a company you should keep records for six years from the end of your accounting period. However, you might need to keep records for longer if they show a transaction that covers one or more accounting period, if the product is something expected to last more than 6 years, if you sent a late company tax return or if HMRC has begun a compliance check into your company tax return.

You’ll also need to keep a few more records than a sole trader, so we hope you’re stocked up on the stationary!

Limited company owners will be responsible for keeping records of:

• Register of Directors, shareholders and secretaries
• Service contracts
• Certificate of incorporation, memorandum and articles of association
• Share certificates (if applicable)
• Shareholder votes
• Records of resolutions and minutes of meetings
• Register of People with Significant Control (PSC)
• Loans taken by the company
• Director’s indemnities (for security against liability claims or legal costs)
• Transactions of buying shares
• Loans or mortgages against companies assets

As a limited company the way you keep accounting records will also differ from those operating as a sole trader. The accounting records you’ll need to keep include:

• Money received and spent
• Assets owned
• Debts company owes or is owed
• Stock company owns at end of financial year
• Stock takings
• Goods bought and sold (and who they’re bought from and sold to)

What to do if records are lost, stolen or destroyed

If your records are lost, stolen or destroyed you need to do your best to recreate them and inform the Corporation Tax office immediately. You can find all the details you need to get in touch with them here.

Have more questions about what records your company needs to keep? Leave a comment below or give us a call on 020 3355 4047!

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About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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