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Destruction of old files

I went paperless 2/3 years ago and have a room full of files etc going back 10 years.  I'm trying to decide how much I can send for destruction.

I'm torn between the requirements of the Data Protection Act to destroy as soon as there is no longer a reasonable need to keep, as opposed to the Limitation Statute which suggests I keep stuff for 6 years to defend myself against negligence claims, and as opposed to HMRC record keeping requirements which basically mean 6 years.

So far, I've concluded that for clients for whom I've done no work for the past six years (i.e. 2003/4 year ends), it's safe to destroy because the HMRC period has elapsed as has the limitation statute, and I therefore don't reasonable have a reason to keep under the DPA.  That's fair enough (I Think??).

What about ongoing clients?  Should I be destroying their files for 2003/4 and earlier years as well?  My plan would be a quick review of each file to pick out anything of ongoing significance, i.e. permanent file items but shred the main working papers etc.  Is this sensible, or would I be best to keep it all until the client leaves?  I must admit I'm a little apprehensive about destroying older files for current clients but do I have a reasonable need to keep everything under the DPA?

Finally, what about limited companies that have been struck off - do I still have to keep?  Presumably if the co is struck off, it can't sue me for negligence and HMRC are unlikely to re-open especially if they've given clearance under ESCC16.  Is there a case for earlier destruction for ltd co clients rather than keeping for the 6 years?

I'd be interested to hear of anyone else's destruction policy.  I've contacted my professional body (ACCA) but they wouldn't give any real information - just parrotted off the limitation statute, DPA requirements and HMRC record keeping time periods (which I already knew) but refused to give me a clue as to how it works in practice and how the opposing forces can be reconciled.

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09th Sep 2010 14:00

our policy on destruction of client papers

We destroy everything after 6 years if they are no longer a client.

For those who are still clients we destroy working papers (the bulk of the paper in most cases) after 6 years but keep all their correspondence / tax files for ever, or until 6 years after they cease to be a client.

 

  

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By zebaa
09th Sep 2010 15:30

Employers insurance is the big exception - the policy (or a scanned copy) should be kept 40 years. This also applies to companies that no longer operate I think. Quite how this could be enforced however is something I doubt, which will be made all the more difficult when people die. Enforcement might be hell, literally.

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By refs8
10th Sep 2010 13:06

Old Files

We are moving and have had the same issues.

We started by getting rid of those old clients and then are working towards keeping stuff for only six years.

We have too much paper and are looking to save more on our server instead - we will see what happens !

 

 

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11th Sep 2010 14:49

When does limitation start?

AIAI in some instances limitation doesn't start to run until the negligence is discovred?

My view then is destroy nothing, regardless of age, regardless of whether the client is active or not.   That means I have archives going back 20 years.

Even without negligence, theres always a possibility of someone coming back to you, "Hi, you acted for Mum 20 years ago when she bought her sweet shop, do you have a copy of...."

But, its all scanned now, and the policy is:

~ accounts & audit files - scan when the job is signed off, then shred.

~ corri - scan & keep paper for 2 years, then incinerate...

Upside we've got everything since time in memorial, downside need to upgrade server storage and backup facilities occasionally.

In terms of moving old stuff to scan, the cost of outsourcing this was horrid.  Bought a 40 ppm scanner and a student for the summer...

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11th Sep 2010 17:57

Time limits

You can't be sued for negligence in respect of something you did more than 15 years ago (even where the loss to the client has only recently come to light).  But HMRC can, I believe, seek tax, interest and penalties from clients on matters which have occurred within the last 20 years or thereabouts.

With regard to criminal offences (either yours or your clients) there is no expiry date.

Also of course tax arising from current events can be affected by historical transaction prices.

I ceased to be in general practice more than 10 years ago but still have some client files from that period (frankly I have kept the ones relating to clients in respect of whom queries were more likely to arise) and my professional indemnity policy specifically includes coverage for that period.

I will retain files from my current practice indefinitely (because they relate to criminal cases).

David

www.AccountingEvidence.com

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13th Sep 2010 08:16

Old Files

Like others I use the six year rule but for current clients I give them the option of taking the file off my hands. I do go through all old files for anything of interest for example details of personal pensions or retirement annuities. I also keep schedules of any files destroyed or returned to clients showing the client name and the period of paperwork concerned. I think the presence of a system together with the Statute of Limitations should cover most things and hopefully my insurer would cover anything that I've missed.

 

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13th Sep 2010 08:20

Old Files

Like others I use the six year rule but for current clients I give them the option of taking the file off my hands. I do go through all old files for anything of interest for example details of personal pensions or retirement annuities. I also keep schedules of any files destroyed or returned to clients showing the client name and the period of paperwork concerned. I think the presence of a system together with the Statute of Limitations should cover most things and hopefully my insurer would cover anything that I've missed.

 

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