--- title: "What Records Does HMRC Expect You to Keep? | HLS | HLS Accounts" description: "What business records HMRC expects you to keep, how long to keep them as a sole trader or limited company, and a simple monthly routine to stay organised." canonical: "https://hlsaccounting.co.uk/blog/what-records-does-hmrc-expect-you-to-keep-for-your-business" --- # What records does HMRC expect you to keep for your business? ![Smiling blonde woman with long hair wearing pink blazer and black top against dark vertical panels](/_next/image?url=%2Fapi%2Fmedia%2Ffile%2Fhannah-1-64x74.png%3Fv%3D1773230081541&w=128&q=75&dpl=dpl_DEc4fGhEc1SCRZZutzoEsRuDy1CJ) Hannah SimpsonChartered Accountant PublishedSaturday, 7 February 2026 ![Person writing in lined notebook beside laptop, calculator, and stacked receipts on wooden desk](/_next/image?url=%2Fapi%2Fmedia%2Ffile%2Fdesk-calculator-receipts-notes.png%3Fv%3D1778511015883&w=1536&q=75&dpl=dpl_DEc4fGhEc1SCRZZutzoEsRuDy1CJ) HMRC expects every business to keep records of its income and expenses: sales invoices, purchase receipts, bank statements and anything else behind the figures on your tax return. Sole traders must keep them for at least five years after the filing deadline; limited companies for six. Here is what that means in practice, and a simple routine that keeps it painless. ## Why record keeping matters Good records are not just about compliance. They give you a clear picture of what is coming in and going out, and they make everyday [bookkeeping](https://hlsaccounting.co.uk/service-categories/bookkeeping-services) much easier, especially [bank reconciliation](https://hlsaccounting.co.uk/services/bank-reconciliation), [VAT returns](https://hlsaccounting.co.uk/services/vat-returns) and [year end preparation](https://hlsaccounting.co.uk/services/month-end-close-year-end-close). And if HMRC ever asks questions, organised records are the difference between a quick reply and a stressful few months. ## The main records HMRC expects you to keep For most small businesses, the list is: sales records and invoices issued, purchase invoices and expense receipts, bank statements, and details of any other money moving in or out of the business. [HMRC requires](https://www.gov.uk/self-employed-records/how-long-to-keep-your-records) sole traders and partnerships to keep records of business income and expenses for Self Assessment, and the nominated partner must also keep records for the partnership itself. You will also need records of your personal income. ## Income records Your income records should show where money came from and when it was received or invoiced: sales invoices, till rolls, booking system reports, payment processor statements and records of cash payments. The test is simple: your records should support the figures that go into your return. HMRC's [legal framework](https://www.gov.uk/hmrc-internal-manuals/self-assessment-legal-framework/salf211) requires you to keep and preserve the records needed to make a correct and complete tax return. ## Expense records Keep evidence of your business costs: receipts, supplier invoices, mileage logs, software subscriptions, office costs, stock purchases, travel and financial charges. If you claim a cost, there should be something behind it showing what it was, when it was paid, and that it was genuinely for the business. Our guide to [what a sole trader can claim](https://hlsaccounting.co.uk/blog/what-expenses-can-a-sole-trader-claim) covers the allowable categories. > **Three details per record.** HMRC's [digital record keeping guidance](https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/create-digital-records) for Making Tax Digital expects each record of income or expense to include the amount, the date, and the category. Capture those three things at the time and year end largely takes care of itself. ## Bank records Bank statements support your income and expense records, and they are essential for checking your bookkeeping is complete. A proper [bank reconciliation](https://hlsaccounting.co.uk/services/bank-reconciliation) matches the transactions in your account to your software, catching duplicates, missing items and errors before they grow. Keeping business and personal banking separate makes every part of this easier. ## Digital records and Making Tax Digital Most businesses now keep records digitally, and increasingly that is not optional. > **MTD for Income Tax is now live.** From April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records in compatible software and send HMRC quarterly updates, with the threshold dropping to £30,000 from April 2027. VAT registered businesses have been under the same digital record rules for years. If you are still on paper or spreadsheets and the thresholds catch you, [getting set up](https://hlsaccounting.co.uk/services/making-tax-digital-mtd-bookkeeping-compliance) is now a deadline, not a nice-to-have. If your software connects to your bank, you may still need to add detail (the category in particular) to make records complete. ## How long do you need to keep business records? > **Retention periods at a glance, as at June 2026** > > - Sole traders and partnerships: at least **five years** after the 31 January filing deadline of the relevant tax year. Your 2024 to 2025 return, filed by 31 January 2026, means keeping those records until at least the end of January 2031 > - Limited companies: at least **six years** from the end of the financial year the records relate to, longer if a transaction spans years, the company bought equipment expected to last more than six years, or a return was filed late > - VAT records: generally six years ## What happens if records are missing? Missing records cause inaccurate returns and unnecessary stress when questions come up later. If records are lost, stolen or destroyed and cannot be replaced, HMRC expects you to do your best to provide figures, and you must tell HMRC if your return uses estimated or provisional numbers. A good accountant can often reconstruct reasonable figures from bank statements, but prevention is far cheaper than reconstruction. ## A simple way to stay organised The real issue for most owners is not knowing what matters; it is finding the time. A monthly routine makes the difference: 1. Save sales invoices and purchase receipts as you go (phone photo into your software is fine) 2. Keep business spending clearly separated from personal 3. Reconcile the bank account once a month 4. File anything unusual (loans, asset purchases, insurance claims) somewhere you can find it [Receipt capture and paperless bookkeeping](https://hlsaccounting.co.uk/services/receipt-management-and-paperless-accounting) automates most of step one, and [monthly bookkeeping](https://hlsaccounting.co.uk/services/monthly-bookkeeping) keeps the rest ticking over without a year end scramble. ## Frequently asked questions ### Do I need to keep paper receipts if I have a photo? No. HMRC accepts digital copies for most records, so a clear photo or scan stored in your bookkeeping software is fine, and it is exactly what Making Tax Digital encourages. A small number of documents, such as some CIS vouchers and documents showing tax deducted, should be kept in original form. ### How long should a limited company keep records? At least six years from the end of the financial year they relate to. Keep them longer where a transaction covers more than one year, an asset is expected to last beyond six years, or the company filed a return late. Directors remain responsible even after the company stops trading. ### What records do I need to keep for VAT? Everything behind each return: sales and purchase invoices showing VAT, your VAT account reconciling what you charged and reclaimed, and import or export documents where relevant. VAT records must be kept digitally under Making Tax Digital and retained for six years. ### Can HMRC ask to see my records? Yes. HMRC can open a compliance check and request the records behind any return, generally going back four years, or further where errors were careless or deliberate. Organised records usually mean these checks close quickly. Our guide to [what triggers an HMRC VAT investigation](https://hlsaccounting.co.uk/blog/what-triggers-hmrc-vat-investigation) explains how selection works. ## Spending too long on the books? At HLS Accounts in Cardiff, we keep records clean, organised and HMRC-ready for small businesses across South Wales, from [receipt capture](https://hlsaccounting.co.uk/services/receipt-management-and-paperless-accounting) through to [monthly bookkeeping](https://hlsaccounting.co.uk/services/monthly-bookkeeping) and year end. If you are not sure your current records are good enough, we will tell you straight and fix the gaps. [Book a free consultation](https://calendly.com/hlsaccounting/new-client-meeting) or call us on 02922 805941. 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