What are the statutory records?

What are the statutory records?

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My Finance team is finally biting the bullet and preparing to clear out the archive store.

Obviously we need to retain all the statutory records for (at least) the past 6 years but what are they exactly? I don't think that I have ever seen a definition. I have always retained anything that directly supports expenses, revenues and taxes of any description so invoices (both purchase and sales) all payroll records (including duplicate payslips) petty cash vouchers and bank statements.

Things that I have binned as being non-statutory have been items such as management accounts, journals, sales and purchases daybooks, nominal ledger journals, supplier statement reconciliations and so forth. Maybe I've been fortunate so far in that I have never had to reconstruct previous years' records for HMRC.

Does anyone know of a statutory definition or, failing that, best practice?

Regards

Jon

Jon Mathias

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David Winch
By David Winch
04th Jun 2007 22:38

Statutory books and accounting records

Jon

Traditionally statutory books meant such records as the minutes of directors' meetings and shareholders' meetings, share ownership registers, registers of the names and addresses of directors and company secretaries, and other records specifically required by statute.

However accounting records are also required by company law. Have a look at sections 386 and 388 of the Companies Act 2006 (which are very similar to sections in the Companies Act 1985 but can be more readily found online).

Of key importance is that the records are sufficient to "show and explain" the company's transactions and to enable statutory accounts to be prepared that comply with the requirements of the Companies Acts. But don't overlook records of stocks (including stocktakes).

That having been said, the requirements of HMR&C are not limited to the Companies Act requirements.

I would have some concern about destroying journals and daybooks. They contain information which is essential to support the figures in the annual accounts.

I would be less concerned about management accounts and supplier reconciliations, except that in a PLC or subsidiary or a very large private group of companies, management accounts might be useful to support transfer prices.

Of course in cases of suspected tax fraud HMR&C can go back 20 years!

David
www.AccountingEvidence.com

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By pauljohnston
06th Jun 2007 17:35

Records
Can I suggest

1 In future all books are returned to client after audit/accounts.
2 Any that relate to current clients are now returned.
3 That rather than destroying the remaining records (Maybe with glee). That you have them professional scanned

This seems a hard lesson but that is what we did and I am confident that should they be needed they will be with the client or copies will be on one of our servers.

Good Luck with what ever you decide

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David Winch
By David Winch
07th Jun 2007 00:52

Response to Paul

Fair points Paul. My earlier response assumed that the question was from a company director rather than a practising accountant.

David

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