As you are aware every individual, partnership or company that carries on a trade or a profession is obliged to retain records that will enable true returns to be made of profits or gains under Section 886 TCA 1997. Linking documents which are drawn up to make up accounts and which show details of the calculations linking the records to the accounts must also be retained.
The records kept must relate to:
- All sums of money received and expended in the course of the trade or profession and the matters in respect of which the receipt and expenditure take place.
- All sales and purchases of goods and services.
- The assets and liabilities of the trade or profession.
In the course of a recent revenue audit of a restaurant the Revenue Commissioners stated that the retention of a daily sales total from the cash register was not sufficient for the purposes of Section 886 TCA 1997. The Revenue Commissioners stated that it was necessary to retain daily till receipts that showed all the individual sales from the day as well as the end of day total to comply with Section 886 TCA 1997 (see 1. above).
We understand that this may prove cumbersome for businesses with a significant amount of daily transactions however it is absolutely necessary to comply with the legislation.
Moreover the Revenue Commissioners stated that in their view the restaurant should have retained all the order dockets on a daily basis for comparison with the final daily till receipts. While we don’t necessarily agree that the legislation dictates retention of order dockets (where applicable) is necessary to comply with Section 886 TCA 1997 the Revenue Commissioners may well ask to see them in the course of a revenue audit in a business where order dockets are relevant (e.g. a restaurant or a pub serving food).
Records and linking documents must be retained for a period of 6 years following the year of assessment (individuals) or the accounting period (companies) to which they relate.
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