How long must records be kept?
SA writes: I am finishing as clerk to the Almshouses and going through the files with the incoming clerk. Some material will go to the Records Office, e.g. the minutes from 1880 to 1960. Other records include documents relating to investments; invoices for work done on properties; and bank statements. Is there guidance about how long we should keep everything?
This question is commonly asked, but is not easy to answer. There are different legal requirements depending on whether your organisation is governed by the Companies Act, the Charities Act or both. There are also HM Revenue & Customs requirements that apply regardless of the nature of the entity, writes James Cross, charities partner at Kingston Smith LLP. It is an important issue because, regardless of whether records are kept in paper or electronic form, the longer they need to be kept, the more expensive it is.
Clearly, items of historical value, such as minutes dating back decades or hundreds of years, should be sent to the Records Office, as you say. You should, however, keep a permanent record of those items sent to the Records Office, so that they can be traced if necessary.
For most accounting records the general rule is that they should be kept in paper or electronic form for three years, if you are a private limited company, or six years, if you are a registered charity. In both cases the period starts from the end of the financial year in which the transaction was made. Of the items that you mention specifically, bank statements should be kept for three to six years (as applicable); invoices relating to capital transactions must be kept for ten years; and an investment ledger should be maintained permanently. This could take the form of the periodic reports that you receive from your investment manager, but you do not need to keep individual contract notes for longer than six years. Payroll records should be kept for six years in addition to the current year.
There are also specific document retention requirements for resident/care records which may be relevant to your organisation as an Almshouse. These may range from records of complaints or investigations to bath and shower temperature logs. You should obtain specialist advice as to what records you should be keeping and for how long. Further guidance can be found onwww.charity-commission.gov.uk.