The storage of company paperwork can prove to be difficult, if not managed properly. Unfortunately, every company throughout the world has to retain certain documents in order to function as a legal entity. Failure to comply with government requirements can result in a fine at best or even lead to prosecution.
How to comply with the government
The UK government’s own website stresses the importance of company document retention. For some businesses the amount of paperwork that they have to store in order to be compliant may be quite daunting. Storage boxes with an efficient paper logging system are a solution for all companies and mean that records can be archived neatly and accessed at any time. The UK tax office, HMRC, states: ‘All businesses must keep and preserve certain records and accounts and be able to present these upon request to HMRC.’
Make sure that you are up-to-date with government legislation
If you are in any doubt about what records you must keep, then it’s a good idea to make an appointment with your local tax office and speak to an advisor. The HMRC’s own website also has advice, but sometimes a personal interview can be more informative for your particular business.
Company officers must be aware of the law
Of course, the company accountant should be aware of all of the current company legislation. For example, a company that is VAT registered will have to follow different rules to a company that isn’t registered for VAT. Those companies that are involved in import and export have to retain other types of documentation and at times the rules and regulations concerning the storage of company documentation can appear complex.
How long should a company keep its documents?
In extreme circumstances, for example, should company activities provoke a full HMRC investigation, the government recommends that documents are stored for 10 years. This will amount to an awful lot of paperwork. It is essential that from the moment the company is started that an efficient archive storage system is put in place.
Seek help for storage advice
If your paper storage system is causing problems then HMRC recommends that you contact their own National Advice Service. This office will be able to advise you about the length of time you have to retain certain documents and, in some cases; you’ll discover that they will be able to reduce this timeframe.