Why Is Keeping Accounting Records Updated Essential For Companies?

Do You Know? HMRC can fine £3,000 to your company or even disqualify you as the company CEO for not keeping up-to-date accounting records. That’s why keeping updated financial and accounting records are essential for every company situated in the United Kingdom.

Top Birmingham Tax Accountants say that HM Revenue and Customs (HMRC) regularly check the companies’ financial records located in the United Kingdom. They make sure that business owners are paying their taxes regularly and are not involved in any tax fraud.

What Type of Records Should You Update?

According to Birmingham accountants, all the records of the company must be updated. As the director of operations, you must keep the following details:

  • Shareholders, Company Secretaries, and Shareholders.
  • The data of any resolutions or shareholder votes.
  • Information about the loans that your company has to pay or get paid back from others. If your company is to be paid back, then keep the report of the person who needs to pay back the loan.
  • Details of indemnities or payments that go wrong due to the company’s fault.
  • Details of transactions made when others buy shares of your company.
  • Details of mortgages or loans.
  • Other information, financial records, and calculations related to companies’ tax returns and annual account transactions.
  • Details of the money spent during an annual year. It may include orders, delivery notes, receipts, contracts, invoices, till rolls, sales books, etc.
  • Other documents such as bank correspondence and statements.

Maintain a Register of People Who Have Significant Control Over the Company

Birmingham Tax Accountants advise maintaining a register of people who have significant control over the company. The record must contain the following details:

  • Information of people who have more than 25% voting rights or shares in the company.
  • Information of people who have the power to remove or appoint the directors of the company.
  • Information of people who have control over company or trust.

What Accounting Records Should You Keep?

Birmingham Accountants Recommend You To Keep The Following Accounting Records:

  • Details of the money spent and received by your company.
  • Details of every asset that your company owns.
  • Details of the debts that your company owes.
  • Details of the stocks that your company buys or sells.
  • Details of every share that your company owns.
  • Details of every merger and acquisition.
  • Details of goods sold and bought.