How long to keep business records

How long do you have to keep business records in the UK?

It depends on how you run your business, and most businesses fit more than one line below. Find every line that applies to you.

Sources: What you must do as a CIS contractor, Self-employed records, Company and accounting records, VAT Notice 700/21, PAYE records.

If more than one line fits, keep each year’s records until the last of those periods has passed. HMRC’s VAT guide says the same: Records that you use for other tax purposes may need to be kept for longer periods.

Watch the shortest ones. CIS and payroll records only need 3 years, but the same invoices and payslips are usually also your company or Self Assessment records, so they have to stay for the longer period too.

Keeping records is the last of the six monthly jobs for a contractor. Our guide to how CIS works lists the other five.

When do you have to keep records for longer than 6 years?

When a limited company’s records fall into one of four cases. GOV.UK says company records must be kept for 6 years from the end of the financial year, or longer if:

• they show a transaction that covers more than one of the company’s accounting periods
• the company has bought something that it expects to last more than 6 years, like equipment or machinery
• you sent your Company Tax Return late
• HMRC has started a compliance check into your Company Tax Return

Source: Company and accounting records.

The second one comes up a lot in construction. If the company buys a digger or other plant it expects to use for more than 6 years, keep the records for it beyond the usual period.

Sole traders have a similar rule for very late returns: If you send your tax return more than 4 years after the deadline, you’ll need to keep your records for 15 months after you send your tax return.

When can you throw away old business records?

Once every period that applies to you has passed, and not before. Here is how it works out for a builder’s records from the 2022 to 2023 tax year, trading as a limited company with a year end of 31 March, paying subcontractors and running payroll.

So the earliest that year’s records can all go is 31 March 2029, unless one of the four cases above applies. The CIS records reach their date first, on 5 April 2026, but they are company records as well, so they stay until the company date.

If the same builder were a sole trader, that year’s records would need keeping until at least 31 January 2029: 5 years after the 31 January 2024 deadline. GOV.UK’s own example gives the same answer: If you sent your 2022 to 2023 tax return online by 31 January 2024, you must keep your records until at least the end of January 2029.

What business records do you need to keep?

A record of all the money coming in and going out, and the paperwork that proves it. GOV.UK sets out what each kind of business needs:

• Sole traders and partners: records of all sales and income, all business expenses, VAT records if you’re registered for VAT, PAYE records if you employ people and records about your personal income.
• Limited companies: accounting records that include all money received and spent by the company, details of assets owned by the company, debts the company owes or is owed, stock the company owns at the end of the financial year and all goods bought and sold.
• Contractors who pay subcontractors under CIS: records of the gross amount of each payment invoiced by subcontractors, excluding VAT and any deductions you’ve made from subcontractor payments.
• Employers running payroll: records of what you pay your employees and the deductions you make, payments you make to HMRC, employee leave and sickness absences, tax code notices and taxable expenses or benefits.

Sources: Self-employed records, Company and accounting records, What you must do as a CIS contractor, PAYE records.

CIS contractors keep one more record: If you made deductions, you must also keep records of the costs of materials the subcontractor invoiced you for, excluding VAT. If you are VAT registered, you must keep a copy of every VAT invoice you issue, and keep the ones you are sent as well: The VAT invoices you receive are the primary evidence for you to recover VAT you have incurred as input tax.

Behind the figures, keep the proof. For the self-employed that means all receipts for goods and stock, bank statements, chequebook stubs and sales invoices, till rolls and bank slips. For a company it includes receipts, petty cash books, orders and delivery notes.

Partnerships keep two sets: If you’re the nominated partner in a partnership, you must also keep records for the partnership.

Can you keep business records digitally?

Yes. For Self Assessment, GOV.UK says: There are no rules on how you must keep records. You can keep them on paper, digitally or as part of a software program (like book-keeping software). Whatever you use, they have to be usable: HMRC can charge you a penalty if your records are not accurate, complete and readable.

Two rules ask for software:

• If you are VAT registered. All VAT registered businesses must keep and preserve certain records digitally and keep their accounts within functional compatible software. A scanned copy can replace the paper invoice: If the image is retained and contains all the detail required for VAT purposes, the business does not need to keep the original invoice, unless it’s required for another purpose. Typing the figures into your software is not enough on its own: They must still keep the invoice in its original form, because the data in the functional compatible software is not a copy of the invoice. From 1 April 2029, VAT invoices between VAT registered businesses are set to be e-invoices sent through software (needs Parliament to pass Finance Bill 2026-27). Who is covered and any exemptions come later in regulations.
• If you use Making Tax Digital for Income Tax. Sole traders and landlords with income over £50,000 in the 2024 to 2025 tax year have had to use it from 6 April 2026. GOV.UK says: You or your agent will need to create and store digital records of your self-employment and property income and expenses. The paperwork still matters too: You still need to keep original records or supporting documents (or copies of them) that you have used to prepare your tax return, such as bank statements and invoices.

Sources: Keeping your tax records, VAT Notice 700/21, Making Tax Digital for Income Tax: digital records.

What happens if you do not keep business records?

HMRC can fine you, and a company director can be disqualified. GOV.UK says:

• Limited companies: You can be fined £3,000 by HMRC or disqualified as a company director if you do not keep accounting records.
• CIS contractors: You could be fined up to £3,000 if you cannot show your CIS records when asked by HMRC.
• Employers: If you do not keep full records, HMRC may estimate what you have to pay and charge you a penalty of up to £3,000.

Sources: Company and accounting records, What you must do as a CIS contractor, PAYE records.

What if your business records are lost or destroyed?

Try to recreate them and tell HMRC. Start by getting copies: GOV.UK suggests you ask banks for copies of statements or suppliers for duplicate invoices. Then:

• Sole traders and partners. If you cannot replace your records, you must do your best to provide figures. Tell HMRC when you file your tax return if you’re using estimated figures (your best guess) or provisional ones (to be replaced with the real figures later).
• Limited companies. If you cannot replace your records after they were lost, stolen or destroyed you must do your best to recreate them, tell your Corporation Tax office straight away and include this information in your Company Tax Return.
• Employers. Tell HMRC as soon as possible if you do not have records and cannot replace them.

Sources: Self-employed records, Company and accounting records, PAYE records.

Common questions

How long should I keep personal tax records?

For a Self Assessment return sent on time, GOV.UK says: "You should keep your records for at least 22 months after the end of the tax year the tax return is for". If you sent it late: "You should keep your records for at least 15 months after you sent the tax return". Business records for the self-employed run longer, 5 years after the 31 January submission deadline.