Phillip Bradshaw
Information Manager
Clerk to the
Council
Room 111, County Hall
Phone: 029 2087 3346
Fax: 029 2087 3349
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
Witton-Le-Wear
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.
Registered Office: 140
Coniscliffe Road, Darlington, County Durham, DL3 7RT
This email, together with any attachments, is for the exclusive and
confidential use of the addressee(s). Any other distribution, use or
reproduction without the sender's prior consent is unauthorised and strictly
prohibited. If you have received this message in error, please notify the
sender by email immediately and delete the message from your computer
without making any copies.
**********************************************************************
Privileged/Confidential Information may be contained in this message. If you are not the addressee indicated in this message (or responsible for delivery of the message to such person), you may not copy or deliver this message to anyone. In such case, you should destroy this message and kindly notify the sender by reply email. Please advise immediately if you or your employer does not consent to Internet email for messages of this kind. Opinions, conclusions and other information in this message that do not relate to the official business of the Council of the City and County of Cardiff shall be understood as neither given nor endorsed by it. All e-mail sent to or from this address will be processed by Cardiff County Councils Corporate E-mail system and may be subject to scrutiny by someone other than the addressee.
**********************************************************************
Mae'n bosibl bod gwybodaeth gyfrinachol yn y neges hon. Os na chyfeirir y neges atoch chi'n benodol (neu os nad ydych chi'n gyfrifol am drosglwyddo'r neges i'r person a enwir), yna ni chewch gopio na throsglwyddo'r neges. Mewn achos o'r fath, dylech ddinistrio'r neges a hysbysu'r anfonwr drwy e-bost ar unwaith. Rhowch wybod i'r anfonydd ar unwaith os nad ydych chi neu eich cyflogydd yn caniatau e-bost y Rhyngrwyd am negeseuon fel hon. Rhaid deall nad yw'r safbwyntiau, y casgliadau a'r wybodaeth arall yn y neges hon nad ydynt yn cyfeirio at fusnes swyddogol Cyngor Dinas a Sir Caerdydd yn cynrychioli barn y Cyngor Sir nad yn cael sel ei fendith. Caiff unrhyw negeseuon a anfonir at, neu o'r cyfeiriad e-bost hwn eu prosesu gan system E-bost Gorfforaethol Cyngor Sir Caerdydd a gallant gael eu harchwilio gan rywun heblaw'r person a enwir.
**********************************************************************