If you're audited once, it can happen again. This is especially true if your first audit goes badly. That's why you should always keep your business records. Stick to the IRS recommendation of six years. Keeping business records takes time and space, but the benefits are worth the sacrifices. Having peace of mind as a business owner is invaluable. It's more important to be prepared than have extra filing space. When you get rid of old documents, do it safely. You don't want your information in the wrong hands.
Shredding all paperwork is best. Tearing papers in half and throwing them away is not wise. Protecting your information should be your first concern. Being careless could put your business security at risk. Most records can be thrown away after a while. However, some should be kept as long as possible. These include active lease agreements, operation permits, and stock certificates.
Hang onto these types of documents. You never know when you'll need them. It's wise to keep them separate from your other documents. That way you'll know where they are at all times.
When it comes to record-keeping, it's better to be safe than sorry. Worried about space? Purchase tall filing cabinets instead of short ones. That way you'll make the best use of the vertical space in your office. Better yet, you can rely on digital records backed up offsite.
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These records include all sales documentation, business expenses, personal income, money paid into and withdrawn from the business, as well as VAT and PAYE information if applicable. In all cases, the required records generally include bank statements, sales receipts, purchase invoices, cheque book stubs, and VAT documentation.
In general, company records must be retained for around six years from the end of the accounting period. But some documentation needs to be kept for 10 years, including:.
You must keep PAYE records for three years from the end of the tax year to which they relate. These include notices of tax codes, payments to employees and to HMRC, details of employee sickness and leave, any taxable expenses or taxable benefits. If any business records have been lost or stolen, you should inform HMRC straight away. For more information on which business records to keep, and for how long, our experts at Real Business Rescue can help.
We have vast experience of dealing with HMRC, and can advise on how to approach the situation should you be unable to produce records when requested. Our extensive office network comprises offices across the UK with a partner-led service offering immediate director advice and support.
Complete the details below and our advisors will arrange a visit to your home. Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry.
We will not use your information for marketing purposes. Survey reveals what Brits are looking forward to the most about the return to their daily commute to work following the Covid pandemic. Rishi Sunak opened his budget speech this afternoon in positive spirits, stating this was a budget to prepare the country for a new economy post-Covid. This site uses cookies to monitor site performance and provide a more responsive and personalised experience. This means you must be able to produce a printed, legible copy of the document for them upon request.
Digitizing your records is also a great way to avoid accidentally tossing them in a move or an overzealous fit of spring cleaning.
We recommend scanning every record and receipt in your business, tagging it with a descriptive name, and archiving it forever. If you do end up going the paperless route, remember to keep a backup copy of your documents in a secure second location, like a password-protected hard drive, or a secondary cloud storage service. Your Bench subscription includes unlimited document storage, which means you can keep every receipt, invoice, or IOU in the same place as your bookkeeping.
At year-end, your CPA or tax professional can review your documents and completed financial reports side-by-side, making tax filing a breeze. Learn more. Hold up. Before you toss them, double check to see whether anyone else you do business with might need them.
Creditors, business lawyers, and insurance companies all sometimes require you to keep records longer than the IRS does. This is really just another benefit to keeping digital records. Instead of worrying whether you should be keeping or getting rid of them, you can archive them permanently. Or even better, digitize it. We're an online bookkeeping service powered by real humans.
Bench gives you a dedicated bookkeeper supported by a team of knowledgeable small business experts. Your bookkeeping team imports bank statements, categorizes transactions, and prepares financial statements every month. Get started with a free month of bookkeeping.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.
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