How Long Are Accountants Required To Keep Records

How long should accountants keep clients' records?

Accountancy practices accept to keep a diverseness of records to carry out their day-to-day tasks and see their legal obligations. The length of time UK-based practices can proceed a client'due south records varies depending on the blazon of business they're dealing with and the kind of records they're keeping. We've put together this useful guide to provide you with an overview of HMRC's tape retentivity requirements so that yous and your practice tin remain compliant.

Record keeping for limited company clients

HMRC requires accountants to retain a number of accounting records in relation to express company clients. Practices should go along records detailing:

all money received and spent by the company, including grants
details of assets endemic by the company
debts the company owes or is owed
stock the company owns at the end of the fiscal twelvemonth
all goods bought and sold, including who they were bought and sold to

HMRC generally requires that accounting records are held for six years from the end of the final company financial year they relate to. There are some exceptions to this rule when y'all may consider keeping records for longer than six years, including:

if the records show transactions that embrace more than than one of the company's accounting periods
if the company has purchased an asset that is expected to last more than than six years
if the company'southward tax return has been filed late
if HMRC is in the process of carrying out a compliance check on your customer

Tape keeping for sole trader clients

For clients who are sole traders, accountants need to keep records that include details of:

all sales and income including invoices and bank slips
all business expenses
VAT records (if applicative)
PAYE records (if applicable)
personal income
grants, including the Self-Employed Income Support Scheme (SEISS)

If your client is withal using traditional accounting methods, you may also have to retain additional records, such every bit:

the value of your client'southward stock at the cease of the bookkeeping period
debts that your customer owes or is owed
money that your client has invested in their business

For sole trader clients, HMRC requires accountants to hold financial records for a minimum of five years following the 31st of Jan submission deadline for the relevant tax year. In instances where your client'due south tax return is filed more than than four years after the deadline, the records should then be retained for 15 months later the engagement of submission.

Record keeping and money laundering regulations

In add-on to HMRC's record retention policies outlined above, The Coin Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2022 require that accountants keep sure customer records for a set catamenia of time, regardless of the client's business type.

The regulations state that records, including evidence of the client's identity and details relating to the business relationship, are retained by the accountant for five years following the finish of the working relationship.