What records do I need to keep for my limited company?
Keep all business records for at least 6 years. This includes bank statements, invoices, receipts, payroll records, and accounting records. Companies House records must be kept indefinitely.
Detailed Explanation
Statutory records (keep forever)
- Certificate of Incorporation - Memorandum and Articles of Association - Register of members (shareholders) - Register of directors and secretaries - Register of PSCs (People with Significant Control) - Minutes of board and shareholder meetings - Share certificates and transfers
Accounting records (keep 6 years)
- All invoices issued - All receipts and bills paid - Bank statements - Petty cash records - Credit card statements - Contracts and agreements - Annual accounts - VAT records and returns
Payroll records (keep 6 years)
- P45s, P60s, P11Ds - Salary and wage records - Benefits records - Pension contribution records - RTI submissions to HMRC
Tax records (keep 6 years)
- Corporation Tax returns and computations - Self Assessment records - R&D tax relief claims and evidence - Capital allowance calculations
Why 6 years? - HMRC can investigate up to 6 years back (20 years for deliberate errors) - Companies House requires 3 years but 6 is safer - Contracts typically have 6-year limitation period
Digital records
- Scanned receipts are acceptable - Keep originals of critical documents (contracts, share certificates) - Ensure backups are secure
Source: HMRC Record Keeping Requirements
Real-World Examples
VAT Inspection Scenario
Your limited company is VAT registered. HMRC requests to see your VAT records for the past four years to verify your VAT returns. Without accurate and readily available records of your sales and purchases, you could face penalties and interest charges.
Director Loan Account Overdraft
You've taken money out of your company as a director's loan. HMRC might investigate if the loan is not repaid within nine months of the company's year-end. Proper accounting records demonstrating the loan and repayment (or interest charged) are crucial.
Claiming Business Expenses
You claim business expenses, such as travel and accommodation, through your limited company. HMRC may scrutinise these claims during a tax inspection. Detailed receipts and records showing the business purpose of each expense are vital to justify your claims and avoid disallowed expenses and potential penalties.
Common Mistakes to Avoid
- Failing to keep records of small cash transactions can lead to discrepancies in your accounts and potential tax issues.
- Not backing up your digital accounting records means you risk losing vital information in case of computer failure or data breach.
- Mixing personal and business transactions in your bank account makes it difficult to accurately track business income and expenses.
- Discarding records earlier than the six-year requirement can leave you unprepared for an HMRC inquiry, even if it seems unlikely.
Frequently Asked Questions
What format should I keep my records in?
You can keep your records in paper or digital format. Digital records must be easily accessible and readable by HMRC. Consider using accounting software like AccountsOS to streamline the process.
Do I need to keep records of employee expenses?
Yes, you must keep records of any expenses you reimburse to your employees, including travel, accommodation, and subsistence. These records are needed to demonstrate that the expenses are wholly and exclusively for business purposes and properly accounted for in payroll.
If I use cloud accounting software, does that satisfy the record-keeping requirements?
Yes, using cloud accounting software generally satisfies record-keeping requirements, *provided* the software adheres to HMRC guidelines for digital record keeping and you retain access to the records for the required duration. Ensure your chosen software is compliant and securely backs up your data.
What happens if I can't find a receipt for a small expense?
For small expenses where a receipt is genuinely lost or unavailable, you can create a 'petty cash' record detailing the expense. However, this should be for genuinely small and infrequent amounts, and should not become a regular practice. HMRC is unlikely to accept a large number of 'lost' receipts.
Practical Tips
- Set up a dedicated business bank account to keep your personal and business finances separate, making record-keeping much easier.
- Use accounting software with built-in receipt scanning features to digitally store and categorise your expenses as you incur them.
- Implement a clear filing system for both physical and digital documents, so you can easily find what you need when requested by HMRC or your accountant.
- Schedule a monthly review of your records to ensure they are complete and accurate, which will save time and reduce stress at year-end and during any potential HMRC investigations.
Related Questions
What is a Confirmation Statement?
A Confirmation Statement (formerly Annual Return) confirms your company's details are correct with Companies House. It's due at least once every 12 months and costs £34 to file online.
When are annual accounts due?
Annual accounts must be filed with Companies House within 9 months of your accounting period end. For HMRC, you have 12 months to file your Corporation Tax return including the accounts.
What is Making Tax Digital (MTD)?
Making Tax Digital is HMRC's initiative requiring businesses to keep digital records and submit returns using compatible software. VAT is already under MTD; Income Tax follows in April 2026.
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