What receipts and records do I need to keep for HMRC?

HMRC requires businesses and individuals to retain adequate financial records to support the figures submitted on tax returns, VAT returns, and accounts. The required retention period and types of records differ depending on your business structure.

For limited companies, the Companies Act 2006 and HMRC both require accounting records to be kept for at least six years from the end of the accounting period to which they relate. This means that records for the year ending 31 March 2026 must be retained until at least 31 March 2032. If HMRC opens an investigation, the retention obligation extends until the investigation is resolved.

For sole traders and self-employed individuals, HMRC requires records to be kept for five years after the 31 January Self Assessment filing deadline for the relevant tax year. For 2024/25 (filed by 31 January 2026), records must be retained until at least 31 January 2031.

The specific records that must be kept fall into several categories.

Sales and income records: All invoices raised to customers, evidence of payments received, bank statements showing income credits, contracts for services, and any other evidence of income. If you use a point of sale system, till rolls and transaction logs count as income records.

Purchase and expense records: Invoices and receipts for every business purchase or expense, purchase orders, delivery notes, and contracts with suppliers. For expenses claimed on Self Assessment, receipts must match the description and amount used in the tax return.

Bank statements: All business bank account statements for the period. Where you use a personal bank account for business transactions (not recommended), the relevant statements must also be retained. Bank statements corroborate both income and expenses.

Payroll records: If you employ anyone including yourself through PAYE, retain payroll records showing gross pay, National Insurance, Income Tax deducted, net pay, and employer NI for each employee for three years after the tax year to which they relate. HMRC's PAYE requirements are separate from the general records obligation.

VAT records: If VAT-registered, you must keep VAT records for at least six years. Under Making Tax Digital for VAT, these records must be kept in digital form in compatible software. VAT records include VAT invoices issued and received, the VAT account (output and input tax totals), and any adjustments.

Asset and capital records: For any capital assets owned by the business (equipment, vehicles, property), keep the purchase invoice, any improvement costs, and disposal records for as long as you own the asset and for the applicable retention period after disposal. These records support Capital Gains calculations and Annual Investment Allowance claims.

Mileage records: If you claim mileage for business travel, keep a mileage log showing the date, departure point, destination, business purpose, and miles for each journey. This is required for AMAP claims and useful for the actual costs method.

Records can be kept in either paper or digital format. HMRC accepts digital records, photographs of receipts, and scanned documents provided they are legible and the format is accessible. Under MTD for VAT and MTD for Income Tax, digital record-keeping is mandatory using compatible software.

If records are lost, stolen, or destroyed, inform HMRC as soon as possible. You may be able to reconstruct records using bank statements, copies of invoices from suppliers and customers, and estimates where reasonable. HMRC will take a pragmatic approach if the loss was genuinely unforeseeable and outside your control, though deliberate non-retention is treated as evasion.

The penalty for failing to keep adequate records is up to £3,000 per tax year. HMRC can assess this penalty if an enquiry reveals that records were not maintained to the required standard, even if no additional tax is found to be due.

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