What business records should you keep for HMRC, and for how long?

Every UK business is legally required to keep records that support the figures in its tax returns. The rules are not complicated, but they are specific, and failing to follow them can mean penalties, disallowed expenses and a stressful process if HMRC asks questions. This guide sets out what to keep, for how long, in what form, and how to make it a routine rather than a burden.

Why record keeping matters

Records do three jobs. They let you calculate your profit and tax correctly. They give you evidence if HMRC opens an enquiry. And they protect you from the most common cause of overpaying tax: expenses you could have claimed but could not prove.

HMRC can charge a penalty of up to £3,000 for failing to keep adequate records for Self Assessment, and a company director or sole trader who cannot support a claim may find it disallowed. Good records are cheaper than the alternative.

The core records every business should keep

Income records. Keep every sales invoice, till record, payment platform report and bank statement showing money received. If you sell through marketplaces such as Amazon, eBay or Etsy, keep the settlement reports, not just the bank payouts, because platform fees and refunds are netted off before payment.

Expense records. Keep receipts, supplier invoices and bank or card statements for every cost you claim. Where a cost has a business and private element, keep a note of how you split it. For mileage, keep a log showing date, journey, purpose and miles.

Bank and card statements. These tie everything together. Reconciling them to your books each month is the single best control you can have. See our bank reconciliation service if you want help.

Assets and capital purchases. Keep invoices for equipment, vehicles and machinery, and a register showing cost and date, because you may claim capital allowances.

Loans and finance. Keep agreements and statements, so interest can be separated from capital repayments.

Extra records for specific situations

If you are VAT registered. Keep VAT invoices for sales and purchases, your VAT account and copies of returns. Under Making Tax Digital for VAT, records must be digital and linked. Learn more in our VAT guide.

If you have employees. Keep payroll records, payslips, P60s, P45s, P11D details, pension records and PAYE payment evidence. Our payroll bookkeeping service covers the accounting side.

If you work in construction. Keep CIS verification, deduction statements and payment records. See CIS bookkeeping.

If you are a landlord. Keep rental income, agent statements, repair invoices, mortgage interest statements and records of improvements.

If you are a limited company. Keep minute books, dividend vouchers, the director's loan account, share records and statutory registers in addition to financial records.

How long to keep records

The retention periods depend on what the record relates to.

Type of business	Minimum retention
Sole trader or partner, Self Assessment	5 years after the 31 January submission deadline for that tax year
Limited company	6 years from the end of the accounting period
VAT records	6 years
PAYE and payroll	3 years after the end of the tax year
Landlords	5 years after the 31 January deadline

For example, for the 2025/26 tax year, the Self Assessment deadline is 31 January 2027, so a sole trader keeps those records until at least 31 January 2032. If you have filed late, claimed losses or had any dispute, keep records longer. Some records, such as asset purchases and property transactions, should be kept well beyond the minimum because they affect later tax calculations.

Can records be digital?

Yes. HMRC accepts digital copies of receipts and invoices, provided they are clear and complete and show the date, supplier, amount and what was bought. You do not need to keep the paper original once you have a good scan or photograph, although you should keep anything that is legally required to be kept in original form.

Digital storage has clear benefits: it is searchable, it can be backed up, and it can be shared with your bookkeeper or accountant. Use software that attaches the receipt to the matching bank transaction. Our receipt and expense capture service sets this up and chases missing items each month.

A simple system that works

Complicated systems get abandoned. A routine like this survives real life.

1. Use a dedicated business bank account. Mixed accounts are the biggest source of record-keeping pain.
2. Capture receipts as you spend. Photograph them or forward emailed invoices to a capture address on the day.
3. Reconcile monthly. Match every transaction in your software to your statement.
4. Back up. Cloud accounting software does this for you. If you keep local files, back them up to a second location.
5. Review once a quarter. Look at uncategorised items, unpaid invoices and missing receipts.

Our free monthly bookkeeping checklist turns this into twelve tick-box jobs.

Common record-keeping mistakes

• Relying on bank statements alone. A statement shows that money moved, not what it was for. You still need the invoice or receipt.
• Losing receipts for small cash purchases. They add up, and unsupported small claims are the easiest for an inspector to disallow.
• Mixing personal and business spending. It makes both harder to prove.
• Keeping records only in an email inbox. Inboxes get cleaned out, accounts get closed and searches fail.
• Throwing records away too early. Check the retention table before decluttering.

What if you have lost records?

It happens. HMRC accepts that records can be lost or destroyed and expects you to make a reasonable effort to reconstruct them, using bank statements, supplier statements, platform reports and other third-party data. If you are in this position, do not guess. Our record rebuild service reconstructs missing periods methodically and documents the assumptions made. If you are months behind rather than missing records altogether, see catch-up bookkeeping.

Checking your own records in ten minutes

You can test the quality of your records quickly. Pick a random month from last year and choose five bank transactions at random. For each one, can you say in under a minute what it was for and find the invoice or receipt? Then check that the month's bank balance in your books matches the statement, and that any VAT or payroll figures match what you reported. If you can do all of that, your records are in good shape. If you struggle on more than one transaction, you have a gap worth fixing now, while the paperwork can still be found. A free bookkeeping health check does this review for you.

Frequently asked questions

Do I need to keep paper receipts?

Not if you keep clear digital copies showing the date, supplier, amount and what was bought. Keep originals only where the law requires them.

How long should a sole trader keep records?

At least 5 years after the 31 January deadline for submitting the tax return that the records relate to.

Does HMRC accept photos of receipts?

Yes, if they are legible and complete. Store them in a searchable system rather than a phone gallery.

What happens if I cannot prove an expense?

HMRC may disallow it, increasing your taxable profit, and may charge interest and penalties. Keep the evidence for every claim.

Can you keep my records tidy for me?

Yes. We keep and reconcile them every month. Get an instant quote to see the cost.