How long should small businesses keep tax records for?

This guide explains which tax records small businesses (including self-employed and limited companies) should keep, and for how long, according to current HMRC rules.

In an ideal world, everyone would maintain records for the same period, regardless of their business structure.

In reality, the time you must keep records varies.

For individuals who are not self-employed or limited company directors, you must keep all tax records for 22 months from the end of the tax period they relate to.

But what about business-related tax records?

Sole traders & partnerships

If you are self-employed and do not operate via a limited company, you must maintain the following records:

1. A record of all sales and takings, including cash receipts.
2. A record of all purchases and expenses, including cash purchases.
3. VAT records – including sales and purchase invoices, import and export documentation, and details relating to your VAT account.
4. PAYE records if you employ anyone.

You must keep these records for at least five years after the 31 January submission deadline of the relevant tax year.

Limited companies

If you operate via a limited company, you must keep the following records:

1. Accounting records of all assets, liabilities, income and expenses.
2. Business records including bank statements, paying-in books, purchases, expenses and sales details.
3. VAT records – including sales and purchase invoices, import and export documentation, and VAT account details.
4. Company records relating to directors, secretaries, shareholders, company resolutions, minutes of meetings, and entries on the PSC register (People with Significant Control).
5. Any debentures, indemnities, loans secured against company assets, and details of share transactions.

These records must be kept safe for at least six years following the end of your company’s last financial year.

Construction Industry Scheme (CIS)

The following details must be maintained by law:

• Contractors – details of all payments made to subcontractors for work done and materials purchased. For example, subcontractor invoices.
• Subcontractors – copies of invoices issued and payment/deduction statements received.

You must keep these records for at least three years following the tax year they relate to.

Employers

If you are an employer, you must keep all PAYE records for three years (in addition to the current year).

Records you should keep include:

• Payments made to employees.
• Deductions from wages (Income Tax, National Insurance, Student Loan repayments).
• Details of employee benefits and expenses.
• Tax code notices.
• Records of statutory payments (sick pay, maternity pay, etc.).

Summary of record-keeping rules

Type of business/records	How long to keep records
Individuals (not self-employed)	22 months from end of tax period
Sole traders & partnerships	5 years after the 31st January deadline
Limited companies	6 years from end of financial year
CIS contractors & subcontractors	3 years from end of tax year
Employers (PAYE)	3 years (plus current year)

Final thoughts from the ByteStart team

Although HMRC sets minimum requirements, it is sensible to keep your tax and accounting records for at least six years, even if you could legally destroy them earlier.

In some cases, such as when HMRC suspects deliberate tax avoidance, records can be requested that go back up to 20 years.

Most small business owners use business accounting software, which helps keep their records safe.

If you change providers or stop using a service, always ensure that you migrate or download your data before your subscription ends. To be doubly safe, download a copy of your cloud data periodically, such as every few months.

Keep any offline paperwork safe too, especially statutory records if you run a limited company.