Good record keeping is one of the most practical things a small business can do. HMRC requires businesses to keep accurate records to support their tax returns, and having well-organised records makes filing easier, reduces errors, and protects you if HMRC ever queries your figures.
How Long Do You Need to Keep Records?
For limited companies, HMRC requires you to keep business records for at least six years from the end of the accounting period they relate to. For sole traders and partnerships, the requirement is generally five years after the 31 January submission deadline for the relevant tax year. Keeping records longer than the minimum is rarely a problem — not keeping them long enough can be.
What Records Should You Keep?
Sales and income records
- Sales invoices issued to customers
- Till receipts or point of sale records
- Bank deposits and payment confirmations
- Records of any other income received by the business
Purchase and expense records
- Supplier invoices and receipts
- Expense receipts for business costs such as travel, equipment, and subscriptions
- Records of any assets purchased for the business
Bank statements
Keep all business bank statements. These should reconcile with your income and expense records and are often the first thing HMRC or a lender will ask to see.
VAT records (if VAT registered)
- VAT invoices issued and received
- VAT account showing VAT charged and reclaimed
- Copies of submitted VAT returns
- Records of any VAT adjustments
Under Making Tax Digital, VAT-registered businesses must keep VAT records digitally and submit returns using compatible software.
Payroll records (if you employ staff)
- Employee details and contracts
- Payslips and payroll calculations
- PAYE records including tax and National Insurance deductions
- P60s and P11Ds
HMRC correspondence
Keep all letters and notices from HMRC, including your Corporation Tax UTR letter, VAT registration confirmation, penalty notices, and any compliance correspondence. These documents are important reference points and may be needed for finance applications or accountant queries.
Company records (for limited companies)
- Certificate of incorporation
- Memorandum and articles of association
- Minutes of board meetings and shareholder resolutions
- Register of directors and shareholders
Digital vs Paper Records
HMRC accepts both digital and paper records, though Making Tax Digital requirements mean VAT records must be kept digitally for VAT-registered businesses. Using accounting software to store records digitally makes retrieval easier and reduces the risk of losing documents.
Keeping Your HMRC Correspondence Safe
Many important HMRC documents — including your UTR letter, VAT registration certificate, and compliance notices — are sent by post to your registered office address. If that address is not monitored, these documents can be missed or lost.
Spectre Offices provides professional registered office addresses across the UK — including London, Manchester, Birmingham, Leeds, Liverpool, Bristol, Newcastle, Glasgow, Edinburgh, Cardiff, Belfast, Bradford, and Huddersfield — so your HMRC correspondence is always received and kept safe.
View our registered office address services →
Summary
Keeping accurate, organised records is a legal requirement and a practical business habit. Sales records, expense receipts, bank statements, VAT records, payroll documents, and HMRC correspondence should all be retained for the required period and stored somewhere accessible. Good record keeping makes tax filing easier, supports finance applications, and protects your business if questions arise.
0 comments