HM Revenue and Customs (HMRC) requires all companies and limited liability partnerships (LLPs) to keep records about the business and its financial transactions for taxation purposes. These records must be kept for a minimum of six years from the end of the last financial year and detail directors, company secretaries and shareholders as well as loan repayment promises, mortgages, assets and financial transactions (income, outgoings etc.). For LLPs, they must also set out the way in which members' capital is accounted for.
A failure to keep proper accounting records can result in the company being fined up to £3,000 and/or company directors being disqualified. If the records are lost, stolen or accidentally destroyed, the company is obligated to inform the tax office and restore the documentation to the best of its ability.
Companies House must be informed if the business changes its registered office address, directors' details or company secretary. A copy of the firm's annual return must also be submitted to Companies House within 28 days of the business's incorporation anniversary. This can be done online or using a paper ARO1 form, with both methods carrying fees. Failure to comply with this requirement is viewed as severe by HMRC and can result in director disqualification, personal prosecution and even company closure.
As you can probably see, bookkeeping can be a complex business and the penalties for getting it wrong can potentially put the entire company at risk. For those reasons, it pays to employ an accountancy firm that is experienced in the necessary procedures and can ensure that your records are clear, concise and correctly filed.
At Coddan, we can take the hassle out of accounting by looking after your company's paperwork so you can concentrate fully on expanding your business. Our team can prepare your annual accounts for both Companies House and tax purposes as well as provide you with regular management accounts so you gain a full overview of performance.