Keeping records for business

My wife and I sold our village store and Post Office business in September 2011. When we moved out we took with us an archive of paperwork dating back to May 2005. Our financial year ran from 1st May to 30th April. This arrangement was a legacy from when we first owned the store and I ran it as a sole trader. My accountant advised that running our financial year from the end of April rather than the beginning of that month it would be advantageous.

Over the 20 plus years that we owned the business we changed the structure to a partnership and then to a limited company. The limited company structure has a lasting benefit in that I can destroy the old paperwork earlier than a sole trader.

The HMRC guidance is that historic paperwork needs to be kept for 6 years. For sole trader and partnership. The 6 years are counted from the date of the relevant tax return and limited companies they are counted from the financial year end.

This May I am able to destroy our records for financial year 2007/08. Of course to ensure that I protect ourselves from identity theft I put them through my shredder.

And then of course it’s also time to prepare our tax returns for 2013/14!

HMRC publish a useful guide called “Keeping records for business – what you need to know” to help businesses understand what they expect.