What records do I legally have to keep (and for how long)?

Internal links: Pillar → "Accounting for non-accountants" · Siblings → "Can I do my own bookkeeping?", "Do I need to file accounts if I made no money?", "When do I have to register for VAT?" · Cross-link (Bucket 2) → "Run your books without becoming a bookkeeper" · Cross-link (Cluster M) → "Get your startup financials investor-ready in a weekend"

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The rule in one line

You have to keep records of everything that affects your tax — money in, money out, and the proof behind it — and you generally have to keep them for six years.

That's the heart of it. The exact list and the exact timeframe shift a little depending on whether you're a sole trader or a limited company, but the principle never changes: if it touches your tax or your accounts, keep it, and keep it long enough that HMRC can check it if they ask.

This page lays out what actually counts as a record, how long to hold each type, and why it's far less of a burden than it sounds once your records live in one tidy place.

What counts as a "record" (it's broader than receipts)

When people hear "keep your records," they picture a drawer of receipts. Receipts are part of it, but the legal definition is wider. A record is anything that backs up the numbers on your tax return or accounts.

In plain English, that means:

• Everything that came in — sales invoices you issued, records of cash takings, bank statements showing money received.
• Everything that went out — purchase invoices and receipts for things you bought, expense records, bank and card statements.
• The bank picture — statements for any account the business uses, plus records of money you put in or took out.
• VAT records, if you're registered — your VAT returns and the invoices behind them.
• Payroll records, if you have staff — what you paid people, the tax and National Insurance, and the reports sent to HMRC.

The simple test: if a tax inspector pointed at a number and asked "prove it," the record is whatever lets you answer. That's what you're keeping.

How long: the timeframes that actually apply

Here's the part everyone wants pinned down. The retention periods differ by entity, so take the line that's yours.

Sole traders and the self-employed. Keep your records for at least five years after the 31 January Self Assessment deadline for that tax year. In practice that works out to a bit under six years from the end of the tax year, so "keep it six years" is the safe rule of thumb.

Limited companies. Keep your records for six years from the end of the company's financial year they relate to. Some need keeping longer — for example, if they cover a transaction spanning more than one year, or if you bought something expected to last (like equipment) that's still in use.

VAT records. If you're VAT-registered, keep VAT records for six years too.

Payroll records. Keep these for at least three years from the end of the tax year they relate to — though many businesses simply keep everything for six to be safe.

The honest simplification: if you keep everything for six years, you're covered on every one of these. There's almost never a reason to throw records away sooner, and one tidy "six years" rule beats trying to remember four different ones.

Why HMRC can look back further than you'd think

Six years can feel like a long time to hold onto a coffee receipt, so it helps to understand why the rule exists.

HMRC can open an enquiry into your tax and ask to see the records behind it. Normally they look at recent years — but if they suspect something's seriously wrong, they can reach back much further. If you can't produce the records to back up what you filed, you're in a weak spot: they can estimate what they think you owe, and you've no evidence to argue otherwise. Penalties also apply for simply failing to keep adequate records.

So the six years isn't bureaucratic box-ticking. It's your evidence file. The records are what protect you if your tax is ever questioned — proof that the numbers you filed were real and right.

Limited companies: the records Companies House cares about too

If you run a limited company, there's a second layer beyond HMRC. As a separate legal person, the company has to keep certain records about itself, not just its money.

In plain English, that includes:

• Who owns and runs it — your register of directors, shareholders, and people with significant control (anyone holding real influence over the company).
• Key decisions — records of certain official company decisions and meetings.
• Share information — who holds shares and any changes.

These usually have to be kept for the life of the company and beyond, and some are reported each year through your confirmation statement (the annual filing that confirms your company's details are up to date). It sounds heavy, but for a small one- or two-person company it's a short, stable list that barely changes year to year. (See: Do I need to file accounts if I made no money?)

Paper or digital? (digital is fine — and usually better)

Good news: you don't have to keep a physical paper trail. HMRC is happy for records to be kept digitally, as long as they're complete, accurate and you can produce them if asked. A clear photo of a receipt is a perfectly valid record once the paper itself fades.

In fact, digital is now the expected direction. Under Making Tax Digital (HMRC's programme to move record-keeping and filing online), VAT-registered businesses already keep digital records and file through compatible software, and it's gradually extending further. So storing your records digitally isn't just allowed — it's increasingly where the rules are heading anyway.

The practical upshot: a shoebox of fading receipts is the harder way to comply, not the safer one. Records that live in one organised digital place are easier to keep, easier to find, and easier to hand over if HMRC ever asks.

Why this is easier than it sounds

Record-keeping has a fearsome reputation — six years of everything, kept perfectly, ready for inspection. Put like that, it sounds like a part-time job.

But notice what the records actually are: they're the exact same information your bookkeeping already captures. Every sale, every purchase, every bank movement, with the receipt or invoice attached. If you're keeping your books even loosely, you're already keeping your legal records — they're the same thing. The "retention" part is just not deleting them.

That's the reassuring truth. You don't keep records and do bookkeeping as two jobs. Do the bookkeeping in one tidy place, attach the proof as you go, and the legal record-keeping is handled as a by-product. The six-year rule becomes "leave it where it is," not "build an archive." (See: Can I do my own bookkeeping? — a realistic guide.)

The short version

You must keep records of everything affecting your tax — money in, money out, and the proof behind each — generally for six years (a little less for sole traders, but six is the safe rule). Limited companies keep extra records about who owns and runs the company, often for the life of the business. Digital records are fully accepted and increasingly expected. And the whole thing is far lighter than it sounds, because these records are simply your bookkeeping, kept in one place and not thrown away. Do your books tidily as you go, and you're already compliant.

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Ready to make record-keeping a non-event? In Ledgers, every transaction flows in from your bank feed, receipts are read from a photo and matched automatically, and nothing ever gets deleted — it's an explainable, event-sourced record where nothing disappears. Your six years of records keep themselves, ready if HMRC ever asks. See your numbers without learning accounting → start free.

Want to know how much bookkeeping you can realistically do yourself? Can I do my own bookkeeping? →

Not trading this year but worried about filings? Do I need to file accounts if I made no money? →

Frequently asked questions

How long do I need to keep business records in the UK?

Generally six years. Sole traders keep records for five years after the 31 January Self Assessment deadline (just under six years from the tax year-end); limited companies and VAT-registered businesses keep them for six years. Keeping everything for six years covers all cases.

What records does a small business legally have to keep?

Anything that supports your tax: sales and purchase invoices, receipts, bank and card statements, VAT records if registered, and payroll records if you have staff. Limited companies also keep records of directors, shareholders and key decisions.

Can I keep my records digitally instead of on paper?

Yes. HMRC accepts digital records, including photos of receipts, as long as they're complete and you can produce them on request. Under Making Tax Digital, digital record-keeping is increasingly the expected norm anyway.

What happens if I don't keep proper records?

HMRC can charge penalties for failing to keep adequate records, and if your tax is ever questioned, you'll have no evidence to back up what you filed — meaning they can estimate what you owe and you can't easily dispute it.

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