How long to keep business records in the UK (and what to keep)

Every business owner eventually looks at a cupboard of old box files or a cloud folder full of receipts and wonders what can safely go. The honest answer is that it depends on your business structure, which taxes you deal with and whether anything unusual has happened. This guide sets out the UK retention periods HMRC expects, explains what actually counts as a business record, and shows how to keep records digitally in a way that satisfies Making Tax Digital without falling foul of data protection law.

What counts as a business record?

HMRC expects you to keep records that are enough to prepare an accurate tax return and to show how you arrived at the figures. That is broader than most people assume. Business records typically include:

• Sales records: invoices issued, till rolls, booking records, credit notes and records of cash takings.
• Purchase and expense records: supplier invoices, receipts, contracts, and records of anything paid in cash.
• Bank and finance records: business bank and card statements, loan agreements, hire purchase and lease documents.
• Payroll records: pay and deductions, payslips, P45s, P60s, P11Ds, statutory pay records and auto-enrolment records.
• VAT records: VAT account, invoices, import and export documents, and the digital records required for Making Tax Digital.
• Asset records: purchase invoices and disposal records for equipment, vehicles and property, which support capital allowances and capital gains calculations.
• Stock records: year-end stock counts and valuations.
• Personal drawings and capital introduced for sole traders and partners, and the directors' loan account for companies.

Limited companies must additionally keep statutory records under the Companies Act, such as registers of members and directors, board minutes and records of resolutions. These are separate from the accounting records and follow their own rules.

UK record retention periods at a glance

The minimum periods below are the ones HMRC and Companies House expect. They are minimums: in several situations, covered in the next section, you should keep records for longer.

GOV.UK sets out these rules in its guidance on business records if you are self-employed and company and accounting records.

When to keep records for longer

A simple "delete after six years" rule is a sensible starting point, but it is not always safe. Keep records beyond the minimum period in these situations.

An HMRC enquiry or dispute is open

If HMRC has opened an enquiry, compliance check or investigation, keep everything relating to the period in question until it is fully closed, even if the normal retention period has expired. The same applies to insurance claims, legal disputes and contractual claims with customers or suppliers.

HMRC's discovery time limits

HMRC can normally make assessments up to four years after the end of a tax year or accounting period. That extends to six years where an error was careless and up to 20 years where it was deliberate. You cannot defend a figure you no longer have evidence for, so if there is any doubt about an old year, keep the records.

Capital assets and long-term transactions

Records for assets you still own, such as property, vehicles, machinery and investments, should be kept for as long as you own the asset and then for the full retention period after it is sold. The original purchase invoice supports both capital allowances claims and any capital gains calculation on disposal, which may be many years later. Likewise, keep records of transactions that span several accounting periods, such as long-term contracts or loans, until the period after they end has passed its retention date.

Leases, guarantees and property

Leases, title documents, warranties and guarantees should be kept for their full life plus a sensible margin. Records of building improvements can matter decades later when a property is sold.

Digital records, scanning and receipts

You do not have to keep paper. HMRC accepts records kept digitally, including scanned or photographed copies of paper documents, provided they are complete, legible and could be produced if asked. For most small businesses, going digital is safer than paper: it is searchable, easy to back up and does not fade.

Receipts

Thermal till receipts fade, sometimes within months. Capture them digitally as soon as you get them, using a receipt app or your accounting software's upload feature. Make sure the image shows the supplier, date, amount and VAT details in full. Once you have a clear digital copy that is backed up, you do not normally need to keep the paper original, though some businesses keep originals for high-value items or where a VAT invoice is unusual.

Making Tax Digital and digital links

Making Tax Digital raises the bar. VAT-registered businesses must keep their VAT records digitally in compatible software, and from 6 April 2026 sole traders and landlords with qualifying income over £50,000 must do the same for Income Tax, with the threshold falling to £30,000 from April 2027 and £20,000 from April 2028. Our guide to Making Tax Digital for Income Tax explains who is affected and when.

Under MTD, data that moves between different pieces of software, for example from a spreadsheet into bridging software, must be transferred through a digital link: an import, a linked cell, an API connection or similar. Retyping or copying and pasting figures between programs is not allowed. HMRC's guidance on VAT record keeping explains the requirements.

Backups and access

Digital records are only useful if you can still open them. Keep at least one backup separate from your main system, check that exports from cloud software work, and when you change software, export and archive the old data before your subscription ends. Losing access to a closed accounting system is one of the most common ways businesses lose historic records.

The GDPR tension: keeping enough, but not too much

Tax law tells you to keep records for a minimum period. Data protection law, under the UK GDPR and the Data Protection Act 2018, tells you not to keep personal data longer than necessary. The two fit together once you recognise that the tax retention period is exactly the justification for keeping the data, and that once it has passed, the justification usually falls away.

In practice this means:

• write a short retention policy listing each type of record, the reason you keep it and how long for;
• delete or securely destroy records containing personal data, such as payroll files, customer details and CVs from unsuccessful applicants, when their retention period ends;
• restrict access to payroll and HR records to those who need it;
• shred paper records containing personal data rather than recycling them.

For more on your data protection duties, see GOV.UK's overview of data protection and the Information Commissioner's guidance.

Organising a filing system that works

The best filing system is one you will actually use every week. Whether it is in the cloud or on a shelf, structure it by financial year first and record type second, so that a whole year can be archived or deleted in one go when its retention period ends.

• Create one top-level folder per financial or tax year, named consistently.
• Within each year, use sub-folders for sales, purchases, bank, payroll, VAT, assets and correspondence.
• Name files with the date, supplier or customer, and amount, for example 2026-05-12 Stationers 48.60.
• Attach receipts and invoices to transactions in your accounting software where possible.
• Keep a permanent folder for asset purchases, leases, loan agreements and company statutory records.
• Add a note of each folder's earliest safe destruction date.
• Review and securely destroy expired records once a year.

Good filing also saves money. When your records are organised as you go, your bookkeeper and accountant spend less time chasing missing paperwork. Our article on bookkeeping habits for small businesses covers the weekly routines that keep records in order.

Penalties for inadequate records

HMRC can charge a penalty of up to £3,000 for failing to keep adequate records, or for failing to keep them for the required period. In practice the bigger risk is indirect. If HMRC questions your figures and you cannot support them, it may estimate your profits or disallow expenses and input VAT, then add tax, interest and inaccuracy penalties on top. Careless errors attract higher penalties than those where you took reasonable care, and good records are the clearest evidence of reasonable care.

Companies also face consequences under the Companies Act: failing to keep adequate accounting records can be an offence for the company's officers.

If your records have fallen behind, the most useful step is to bring them up to date before any deadline or enquiry arrives. Verdi Bookkeeping, based in London NW1, helps businesses rebuild and maintain their bookkeeping records, set up cloud accounting and receipt capture, and organise the paperwork their accountant needs.

Frequently asked questions