Keeping proper records is not just good practice – it is a legal requirement. HMRC can ask to see your records at any time, and poor record-keeping is one of the most common reasons people end up with penalties, estimates, or full enquiries.

This guide explains what records you must keep, how long you must keep them, and why it really matters.

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Why Record Keeping Matters

HMRC relies on your records to check that:

• Your income is complete and accurate
• Expenses claimed are allowable
• Tax calculations are correct

If records are missing or unclear, HMRC can:

• Disallow expenses
• Raise estimated tax bills
• Charge penalties and interest
• Open a formal enquiry

Good records protect you just as much as they protect HMRC.

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Records Everyone Must Keep

If you file a Self Assessment tax return, you must keep evidence to support everything on it.

This includes:

• Bank statements (personal and business)
• Invoices and receipts
• Mileage logs
• Interest certificates
• Dividend vouchers
• Pension contribution statements

Digital copies are acceptable as long as they are clear and complete.

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If You Are Self-Employed or a Sole Trader

You must keep records of:

• All sales and income
• Cash takings
• Invoices issued
• Business bank statements
• Expense receipts
• Mileage and vehicle costs
• Stock records
• CIS statements (if applicable)

How long?
At least 5 years after the 31 January filing deadline for the relevant tax year.

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If You Are a Company Director or Run a Limited Company

You must keep:

• Sales invoices and purchase invoices
• Business bank statements
• Payroll records
• VAT records
• Directors’ loan account details
• Dividend paperwork
• Annual accounts and CT600 returns

How long?
At least 6 years from the end of the accounting period.

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If You Are a Landlord

HMRC expects you to keep:

• Rental income records
• Letting agent statements
• Mortgage interest statements
• Repair and maintenance invoices
• Insurance documents
• Mileage and travel costs related to the property

How long?
At least 5 years after the 31 January filing deadline.

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VAT Records

If you are VAT registered, you must keep:

• VAT sales and purchase invoices
• VAT account summaries
• Records used to complete VAT returns

How long?
At least 6 years (some exceptions apply).

Under Making Tax Digital, most VAT records must now be kept digitally.

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Capital Gains Tax Records

If you sell property, shares, or other assets, keep:

• Purchase contracts and completion statements
• Sale contracts and completion statements
• Legal fees
• Stamp Duty Land Tax documents
• Improvement costs (not repairs)

How long?
At least 5 years after the 31 January filing deadline for the tax year of disposal.

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What Happens If You Do Not Keep Records?

HMRC may:

• Estimate your income and tax
• Remove expense claims
• Charge penalties for careless or deliberate errors
• Extend enquiries back several years

In serious cases, penalties can be significant even if the tax itself is not large.

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Digital vs Paper Records

HMRC allows:

• Paper records
• Scanned copies
• Cloud storage
• Accounting software

The key rule is simple: records must be accurate, complete, and readable.

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Practical Tips to Stay Compliant

• Use a separate bank account for business income
• Photograph receipts immediately
• Keep folders by tax year
• Back up digital files
• Do not rely on banks or agents to keep records for you

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Final Thoughts

Record keeping is not exciting, but it is one of the most powerful ways to avoid stress, penalties, and HMRC disputes. If you are unsure whether your records are good enough, it is always better to fix things early rather than explain them later.

If you would like help reviewing your records or setting up a simple system that works for you, get in touch.

Call 0161 710 1901
Email: Tax@TaxesDoneRight.co.uk