Company Director banned for poor record-keeping? A company director has been disqualified for 11 years and will not be allowed to be involved in the management of any company for this period.

The director was the only director and operated a payroll services company that entered into voluntary liquidation. However, the liquidator found the director to be very uncooperative when requesting the company’s statutory records. This was reported and when investigated it was found that the company was acting as an umbrella company as part of a tax avoidance scheme.

So what can we derive from this extreme case for other company directors?

Well, this serves as a reminder that companies are subject to strict conditions when it comes to maintaining accounting records.

Failure to keep accounting records can lead to a possible fine of £3,000 and/or disqualification from acting as a director.

Here is a link to the HMRC website recommending the company and accounting records to be maintained:

https://www.gov.uk/running-a-limited-company/company-and-accounting-records

How long should you keep your books and records?:

You must keep records for 6 years from the end of the last company financial year they relate to, or longer if:

• They show transactions that cover more than one of the company’s accounting periods
• The company has bought something that expects to last more than 6 years, like equipment or machinery
• You sent your company tax return late
• HMRC has started a compliance review into your Company Tax Return

It is always advisable to maintain up-to-date books and records from a compliance point of view but also for knowing your key performance indicators so that you can drive your business forward!

Further Reading:

Tax Planning Time