We often get asked this question, so we wrote an article explaining how long you need to keep paperwork for tax purposes. Running a business comes with plenty of paperwork. Even with more accounting records now stored digitally, it is important to know what you need to keep and, importantly, how long to keep it.
HMRC can ask to see records to check that you have paid the correct amount of tax, so good record-keeping is an important part of managing your business.
How long should self-employed businesses keep records?
If you are self-employed, you must generally keep your business records for at least five years after the 31 January submission deadline for the relevant tax year.
For example, if you submitted your 2024/25 Self-Assessment tax return online by 31 January 2026, you should keep the relevant records until at least 31 January 2031.
If you submit your tax return very late, different rules can apply. You should also retain records for longer if HMRC has opened an enquiry or you are appealing a decision.
What records should you keep if you are self-employed?
You need to keep sufficient records to support the information included in your Self-Assessment tax return. This includes:
- Records of all sales and other business income
- Receipts and invoices for business expenses, goods and stock
- Sales invoices, till rolls and bank slips
- Business bank and credit card statements
- Mileage records and expense claims
- VAT records if you are VAT registered
- PAYE and payroll records if you employ people
- Records relating to assets purchased or sold by the business
These records help you calculate your business profit or loss and provide evidence if HMRC asks you to explain figures included in your tax return.
What about limited companies?
Limited companies have different record-keeping requirements. Company accounting records must generally be retained for 6 years from the end of the financial year to which they relate.
Companies need to keep records covering all money received and spent, details of assets, money the company owes or is owed, stock held at the end of the financial year and details of goods bought and sold.
You should also retain the supporting documentation used to prepare your annual accounts and Corporation Tax Return. This could include invoices, receipts, contracts, purchase orders, delivery notes, bank statements, petty cash records and relevant correspondence.
Some records may need to be kept for longer than six years. For example, this could apply where a transaction covers more than one accounting period, the company purchases equipment or machinery expected to last for more than six years, a Company Tax Return is submitted late, or HMRC has started a compliance check.
Can you keep records digitally?
You do not necessarily need cupboards full of paper. You can generally keep records digitally, provided they are complete, accurate, legible, and accessible to HMRC if needed. If you use accounting software, this becomes easier. Read this blog for more information about accounting software: Five reasons small businesses should use accounting software.
Getting into the habit of storing records properly throughout the year can also make preparing your accounts and tax returns considerably easier.
At Watson Knipe, we can help you understand your record-keeping responsibilities and implement effective accounting systems. If you are unsure what you should keep or how long to retain particular documents, speak to our team for advice. You can call us on 01623 490 120 or email