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What do I have keep ?

Countdown to finally closing practice , what files do I have to keep and how long for

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Trying to have a clearout before I finally manage to close the doors.

Still got lots of files covering all taxes for old clients who have either retired/sold out/died etc and would like to just keep the minimum amount of files going forward.

The company secretary wants the rooms back ! .

I have found  a couple of posts that say to keep Paye files for up to 6 years, is this correct and is it the same for other taxes and for all my clients who just move onto new accountants.

Your thoughts would be appreciated.    

 

 

 

Replies (10)

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Scalloway Castle
By scalloway
08th Jul 2021 15:21

I initially kept everything less than 7 years old. Every now and them I go through the files and shred stuff that has expired. I do the same with my digital files. I would need to have a go at all the old back up USB drives that I still have as there are probably still a few old files lurking there.

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Replying to scalloway:
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By meadowsaw227
08th Jul 2021 20:05

Forgot about all the hard drives I have got, thanks.

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By Hugo Fair
08th Jul 2021 21:55

There are different lengths of retention for different types of records (some of which are statutory):

* Accounting records - Statutory retention period = 3 years for private companies, 6 years for public limited companies.
[Statutory authority: Section 221 of the Companies Act 1985 as modified by the Companies Acts 1989 and 2006].

* Income tax and NI returns, income tax records and correspondence with HMRC - Statutory retention period = Not less than 3 years after the end of the financial year to which they relate.
[Statutory authority: The Income Tax (Employments) Regulations 1993 (SI 1993/744) as amended, for example by The Income Tax (Employments) (Amendment No. 6) Regulations 1996 (SI 1996/2631)].

* Payroll wage/salary records (also overtime, bonuses, expenses) - Statutory retention period = 6 years from the end of the tax year to which they relate.
[Statutory authority: Taxes Management Act 1970].

Given HMRC's ability to go back further in time, it used to be common to keep records for considerably longer in practice ... but people seem more cavalier about this now.

Of course there are plenty of records that should be kept for much longer (almost indefinitely), such as those pertaining to pensions, trusts, etc ... but that's moving more into the sphere of what the client should be retaining - which raises the quite separate question of what responsibility you have for making this clear to the ex-client (especially if you used to retain most of the primary source records for them).

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Replying to Hugo Fair:
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By Hugo Fair
08th Jul 2021 22:02

And then there's the reverse of your question (as alluded to by others above) ... in terms of winnowing out those retained records on a regular (annual?) basis.

This is not just to reduce the storage problem you currently face, but to comply with GDPR/ICO requirements for security and disposal of the data ... which of course may nowadays be in the blasted cloud, as well as on a multitude of backup devices and/or hard copies!

Good luck.

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Replying to Hugo Fair:
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By meadowsaw227
09th Jul 2021 08:24

Crikey ! .
Looks like the Company Secretary is not getting those rooms back any time soon.
Many thanks for the detailed response.

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By Goffey
09th Jul 2021 09:39

Why not just spend some time scanning all old files onto a usb then shred everything? You can still retrieve any papers if client/HMRC/new accountant needs the information. I do this whenever a client leaves/dies etc. USB takes up a lot less space so should keep the company secretary happy!

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Routemaster image
By tom123
09th Jul 2021 10:28

I found a lovely box of 3.5" disks in my filing cabinet the other day, carefully labelled Payroll 2010 (or something)

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By kiwilondon99
09th Jul 2021 14:30

i found @ the weekend Access Dimension 3.5" setup disks, manual + invoice from 1997 !! & an old sage set of 3.5" disks

happily binned/shredded as appropriate. onto the next archive box ...

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By Hugo Fair
09th Jul 2021 14:39

Aaah, the good old mis-named floppies that were a deal more robust than their forebears ... the correctly named 5 1/4 " floppy disks (not to be confused with the earlier home computing 8" floppy) that were prone to 'human error'.

My favourite being when a client called to say that his PC hard-disk had crashed - so he needed to re-install the programme and then recover data from backups. The only problem being that he was getting 'read errors' from all his backups.
We ascertained that he had been taking backups correctly at the end of each day - and retaining these in his files.

As we'd never before encountered such total failure of backups, we eventually sent someone out to his site where they started by asking to see his filing system. And discovered a ring-binder containing all the floppy-disks which, after the backup had completed, were rigorously hole-punched in order to be kept neat in the binders!

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By buttercup books
13th Jul 2021 10:27

It's the one good thing about GDPR - it mandates that you don't keep anything longer than necessary. 6 years plus current - and - if HMRC want to go back further - sorry - GDPR mandates that it goes - and it went - end of story.

Every year I go in and cull year 8 - very satisfying it is too.

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