Document Retention Policy: Legal Requirements Guide

A document retention policy is crucial when managing and protecting important records to avoid any criminal, civil and financial penalties that are mostly caused by bad data management practices.

Although GDPR does not dictate how long you should keep personal data, organisations are encouraged to set their deadlines based on the personal information they hold. The only requirement under the GDPR is that the organisation must document and justify why it has set the time frame it has.

Shredall SDS Group storage services allow businesses to store their documents off-site until the end of the statutory retention periods while having easy access to their documents. Each document can be indexed, giving a complete inventory, which can then be securely shredded at the end of its retention date.

What is a document retention policy?

A document retention policy is a set of internal guidelines created by a business to regulate how sensitive documents should be handled from the moment they’re created, through to a specified disposal date.

What is a retention period?

A retention period is the required amount of time you should keep your document before securely disposing of it. The minimum retention period depends on the type of document and what the document contains.

What are the benefits of a document retention policy?

If your employees are regularly handling sensitive documents and information, there are several benefits to implementing a document retention policy. The main reason many companies create a DRP is for clarity in legal and regulatory investigations. Should your company ever be audited or investigated by a body like HMRC, being able to provide access to all current documents and show evidence of timely destruction of old documents is vital. Missing documents or records destroyed outside of a schedule can complicate these processes.

More generally, a document retention policy helps a business to be compliant with data security regulations, at both an industry and national level. With GDPR imminent, compliance is more important than ever. Even if you already do things by the book, implementing a concrete policy helps to preserve compliance for the future and can help build trust with prospective clients or future customers.

Finally, there is also a notable business benefit to a DRP. A detailed storage system and destruction schedule removes a lot of ambiguity around what to do with documents, cutting the time it takes to locate them and allowing you to plan for destruction dates. The clearer your business’s processes are, the easier it is for employees to work efficiently. A document retention policy is an important piece of that puzzle.

Legal requirements: retention periods for different documents types

Below are some common document types retention periods explained in detail.

How long to keep payroll data?

Data relating to PAYE, maternity pay, or statutory mandatory pay only needs to be kept for 3 years after an employee leaves your company. Beyond this, it’s unlikely you will have a legitimate reason for holiday pay information for ex-employees.

How long to keep employee records after termination?

Employee data such as personal records, performance appraisals, employment contacts, etc. Should be stored for 6 years after the employee has left. Under the GDPR, the condition for processing would be a legal obligation or legitimate interest.

What is the retention period for tax records?

Tax returns should be kept for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.

How long should you keep business documents?

In general, company records must be retained for around six years, however, some documentation needs to be kept for 10 years, including companies’ statutory books, VAT MOSS records and minutes of board meetings.

Statutory retention periods of documents

Here’s some further common recommended periods of retention dates and the minimum statutory retention period required for multiple document types.

Tips for organising your records retention schedule

The thought of knowing where to start with all your documents can be overwhelming. It all starts with a good clear out and document management. Below are our top three tips to help you get started with your document retention:

Prepare your documents- Depending on the industry, the rules for audit procedures vary. To ensure a successful audit, identify what you will be expected to provide and be prepared to comply with these requirements.

Inventory- Each department should be responsible for a complete inventory of their records, identifying which records can be sent to storage and which can be securely shredded. Keep on top of your inventory to ensure it is up to date and accurate so you can retrieve records promptly.

Retention Schedule- A retention schedule is a policy document that defines a business’s legal and compliance recordkeeping requirements. It is intended to ensure that employees adhere to approved record keeping requirements. This should apply to both electronic and paper documents and should be updated every 12 to 18 months.

If your business needs support with storing documents for the duration of their retention periods or shredding them when possible, get in touch with our team today.