Good records make your tax return easier, help you claim every expense and protect you if HMRC asks questions.
What to keep
- Sales invoices and records of all money received
- Purchase invoices and receipts for expenses
- Bank statements for your business account
- Payroll records, if you employ anyone
- VAT records, if you're VAT registered
- Records of assets you buy or sell, such as equipment or vehicles
- Mileage logs, if you claim mileage
How long to keep them
- Sole traders and partners: at least 5 years after the 31 January submission deadline for the tax year. For example, records for the 2025/26 tax year (return due 31 January 2027) must be kept until at least 31 January 2032.
- Limited companies: 6 years from the end of the financial year they relate to โ longer in some cases, such as assets that last more than 6 years or if HMRC is checking a return.
- Payroll records: 3 years from the end of the tax year they relate to.
Making Tax Digital
If you're in Making Tax Digital โ for VAT, or for Income Tax as a sole trader or landlord over the threshold โ your records must be kept digitally in compatible software.
Tips
- Use a separate bank account for your business
- Photograph receipts as soon as you get them
- Use cloud accounting software that connects to your bank
- Reconcile your records every month, not once a year
We can set up cloud bookkeeping for you โ see our packages.