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If the revenue's argument is sound, retention becomes easy - keep everything forever - as there is no limitation period for fraud you would need to keep everything just in case, as any record can be potentially relevant to an as yet undiscovered fraud. Though ultimately one for the lawyers I agree with those suggesting not going beyond the minimum C+6 on a risk assessment basis Phillip Bradshaw Information Manager Clerk to the Council Room 111, County Hall EMail: <mailto:[log in to unmask]> [log in to unmask] Phone: 029 2087 3346 Fax: 029 2087 3349 _____ From: The UK Records Management mailing list [mailto:[log in to unmask]] On Behalf Of Toby Davison Sent: 27 September 2006 12:03 To: [log in to unmask] Subject: Re: Limitations Act 1980 and Payroll Records Peter, I agree with everything you say. While we are in the process of seeking legal advice and external accountancy advice I do think it is a records retention issue as the revenue are explicitly stating that we should be holding these records, quoting the Limitations Act rather than the Taxes Management Act. You are quite right that the Limitations Act does not govern the retention of records as such, but as records provide the evidence that will quite often be required when a claim is made, that is where the 6 year retention period is applied. This opens up the question of when the 6 year period should start, from the assessment like the Taxes Management Act and how it seems to be generally applied amongst records managers or from when a claim is actually made as the revenue seem to be expecting. If the Revenue has powers to extend retention periods indefinitely if they have reasons to believe tax has been lost, surely this should be discovered within a 6 year time frame to be applied, then there should be no dispute. It was interesting to see that the Limitation (Scotland) act 1973 seems to provide for a 20 year time limit as the link by Donald Henderson illustrates. Toby Toby Davison Archivist/Records Manager The Together Trust The Together Trust Centre Schools hill Cheadle Cheshire SK8 1JE 0161 283 4815 -----Original Message----- From: Peter Emmerson [mailto:[log in to unmask]] Sent: 27 September 2006 10:09 To: Toby Davison; [log in to unmask] Subject: RE: Limitations Act 1980 and Payroll Records It's good to know that Peter Garrod regards the JISC HEI Retention schedule as 'the Bible' on this topic though we would not make any claim to it being the revealed word rather than a lot of hard work. If you follow the link he provides you will see that that the primary citation attached to the retention period is the Taxes Management Act 1970, which as amended and supported by subsequent regulation, controls the activities of the Revenue and by extension the retention of tax-related records. The JISC schedule also emphasises, as we always do with our clients, that the advice given is not legal advice and needs to be confirmed by an institution's professional advisers. The Limitation Act 1980 is also cited but primarily to cover other non-statutory actions which might arise from payroll activities e.g. a dispute with an employee. The TMA, while effectively tying the retention period for payroll records to the maximum period of assessment which is six years from the year to which the assessment relates, allows the Revenue to extend this period indefinitely where it has grounds for believing that tax has been lost as a result of 'fraud or wilful default', though this is largely aimed at the taxpayer rather than the employer. It's perfectly reasonable for your organisation to have disposed of the relevant records after 'CTY+ 6' 'in the normal course of business', in fact for many payroll records the statutory period is much shorter. However, this does not prevent the Revenue from taking action covering a much longer period if it thinks that fraud or wilful default has taken place. It just means you no longer have the records and cannot provide them to the Revenue or use them to defend yourselves. You really need to turn to your professional advisers here as they will have experience of dealing with this kind of action by the Revenue and will be able to argue the case on your behalf. It's not really a records retention issue. The debate raises an issue with using the Limitation Act 1980 as a catch all basis for retention decisions. The Act does not specify periods of retention for records but simply limits the time during which a legal action can take place. You can extrapolate from this that, where no other statutory requirement is in force (my emphasis), six, 12, 15 years would be 'prudential' or 'safe' retention periods depending on the records involved. However, if there is specific legislation then it trumps the essentially risk-based, Limitation Act-driven, response. So the retention of company financial records tends now to be determined by the VAT Act, those of Charities by the accounting requirements of the Charities Acts, and so on. Peter Emmerson Director Emmerson Consulting Limited Poplar House 5 School Street Witton-Le-Wear County Durham DL14 0AS Office 01388 488865 Mobile 07740 942682 This e-mail message is confidential and intended solely for the use of the addressee. If you are not the intended recipient any disclosure, copying, distribution or use of it is prohibited and may be unlawful. If you have received this e-mail in error, please notify the sender immediately and delete it from your system. Emmerson Consulting Limited is registered in England No. 3607347. 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