Business Records – How long do we need to retain them?

Having complete records in place allows you to answer any queries HM Revenue and Customs may have. But how long do you have to retain these records? The answer depends…

For Limited Companies

You must keep your records for 6 years from the end of the last company financial year they relate to, or longer if:

  • They show a transaction that covers more than one of the company’s accounting periods
  • The company has bought something that it expects to last more than 6 years, like equipment or machinery
  • You sent your Company Tax Return late
  • HMRC has started a compliance check into your Company Tax Return

For Self-Employed Businesses (including partnerships and LLPs)

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. Again, it is good practice to keep records for longer-life assets for longer than this.

For individuals

You must keep your records for at least 22 months after the end of the tax year the tax return is for, although if your tax return is submitted after the deadline, then you should keep your records for at least 15 months after you sent the tax return.

There are some records you should keep for longer…

Any details relating to the acquisition and improvement of capital assets, whether this is land or property or other investments.

For example, you may have bought a property in 2002 and built an extension in 2012. These are the sorts of records you need to hold on to for longer. You or your company may need if you sell such assets in the future and need to calculate the taxable gains.

Can I keep electronic records?

Yes. There is no restriction on how you keep your records. They just need to be accurate, complete, and readable.

Disclaimer.

This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated to us.

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