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There is a significant volume of legislation dealing with the subject of company records, but for most smaller entities, making up 55% of UK's GDP, there are actually very few hard and fast rules.
Perfect records are time consuming and expensive to produce, therefore the ideal is to have records that are sufficient to meet all the requirements of compliance, allowing a business to trade with a minimum risk of breaking the law and incurring unnecessary penalties.
The minimum records that have to be maintained must enable the following: Meeting obligations to creditors when they fall due Meeting Companies House deadlines Meeting obligations to Her Majesty's Revenue & Customs when they fall due
Failing to meet the above will lead to immediate fines and penalties, ultimately affecting the goodwill of these organisations, and quite often leading to investigations that are very costly to bring to a close.
On the positive side, good company records can make a significant contribution to planning, execution and delivery of growth and profitable performance.
The aim of this website is to assist directors to comply with minimum requirements. By making sure they are met, money can be spent on professionals that add value to the business, as opposed to fighting the fires of non-compliance.
The most important consequence of not keeping proper company records, including but not limited to company receipts, payments and other bank transactions, is to be accused of money laundering or tax fraud, whether or not it has been intentional. Money laundering regulation for 2007 has introduced legislation that effectively puts all individuals who own, know about, transact with or account for business transactions in the United Kingdom at risk. Punishment for committing money laundering or tax fraud can lead to imprisonment. For instance, a false declaration on a VAT return can earn a sentence of seven years.
It is therefore imperative to ensure that proper accounting records are kept on a day to day basis, but the cost of keeping the records must be viable for the business to continue as a going concern. Please contact me for more detailed guidance on money laundering regulation 2007 or conduct your own Google search.
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