Keep records for six years
DY writes: I have run my own small business for the past five years and I have kept every business record since it was set up. As the company has been steadily growing over the years I am now finding it difficult to find the space in my attic for these records. I am reluctant to throw anything away but now I feel I must consider this option. What can I destroy?
There are designated periods for the length of time business records should be retained. These periods vary depending on whether you are trading as a limited company or a sole trader. If you are trading as a limited company, you should keep all the records until the sixth anniversary of the end of the relevant accounting period. However, if there is an outstanding inquiry into any year of account, then the records should be kept until it is resolved. The requirements are slightly different if you are a sole trader. Self-assessment rules require records to be kept until the fifth anniversary of the January 31 following the year of assessment in which the accounting year is taxed. If there are outstanding inquiries from the Inland Revenue, records must be kept until the issues are resolved. The rules in respect of Vat also require records to be kept for six years. Therefore, whatever basis you have traded on, you should keep your records of your first period of trading for another year.