How Long Should You Keep Accounting Records When Self-Employed?
As a self-employed individual, managing your accounting records is a key part of bookkeeping. But how long should you retain these records? What should be included in your tax documents? And how do you handle it all?
In this guide, I’ll address these questions and explain HMRC’s legal requirements regarding your business records.
If you have questions about this guide or any of my other resources, feel free to join my Facebook group, The Self-Employed Club.

Friendly Disclaimer: While I am an accountant, I’m not your personal accountant. The information provided is accurate but intended for general guidance. Since each situation is unique, use your best judgment and consult a qualified professional if you have specific questions or concerns, as mistakes can lead to penalties.

What Accounting Records Should You Keep?

‘Accounting records’ encompass all the documentation you need for your accounts and tax return. Common records include:

• Bank statements

• Sales invoices

• Receipts

• Till rolls

• Marketplace statements (e.g., eBay, Etsy, Amazon)

• VAT records (if VAT registered)

• P60s or P45s (if employed and self-employed)

• Business mileage claim forms

• Records of other taxable income (e.g., dividends, capital gains)

• Copies of previous tax returns and calculations

• Payslips with your tax code

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Why Keep Business Records?
Maintaining your business records provides evidence for the figures you enter on your tax return. For example, if you claim the cost of a new laptop, the receipt serves as proof of purchase and entitlement to include it on your tax return if HMRC conducts an inspection.

How Long Should You Keep Your Accounting Records?
You must retain your accounting records, including copies of tax returns, for at least 5 years after the 31 January following the year you submit your tax return. For instance, for the 2022/2023 tax return due by 31 January 2024, records must be kept until 31 January 2029.

How to Store Your Accounting Records
HMRC no longer requires paper records, simplifying storage.

• Accounting Software: Platforms like Xero allow you to upload business records as you enter financial transactions.

• Bookkeeping Spreadsheets: Store records in the cloud using services like Dropbox or Google Drive.

Ensure all records are backed up securely. Loss of paperwork can result in penalties, even if it's not your fault.

What If You Lose Your Tax Records?
If records are misplaced, try to obtain copies from suppliers, banks, or old emails. It’s a legal requirement to have tax records, and failure to provide them can lead to penalties or interest if you’ve underpaid tax. If submitting your tax return with missing information, you must inform HMRC if you’re using provisional or estimated numbers.

• Provisional: You plan to replace lost records and will confirm figures later.

• Estimated: You’re making a best guess and will not amend the figures.

How Long Should You Keep Tax Returns?
Self-assessment tax returns should be kept for at least 5 years after the 31 January following submission, similar to other accounting records. It’s advisable to download a copy of your return when submitted, even though it's stored in your online tax account.

How Long Should You Keep Bank Statements?
Bank statements should be kept for at least 5 years after the 31 January following the tax return submission, in line with other records.

Can Bank Statements Serve as Receipts?
Bank statements can be used as proof of a business receipt if transactions are made through a business bank account. Note the reasons for the transactions and the missing receipts in your accounting records to clarify the situation.

By Author Anita Forrest
Posted on: 3rd October 2023
Last Updated: 27th March 2024
Categories: Finances
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About the Author
Hello, I’m Anita. As a Chartered Accountant turned online business owner, I understand the challenges of self-employment. My blog offers guides and tips to help you manage finances, handle taxes, and set up your business effectively.
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