How long do I need to keep accounting records?

There is a mismatch between what HMRC and Companies House require when it comes to how long an organisation must keep certain kinds of data.

Companies Act 2006 states that accounting records need to be kept for 3 years from the date they are made. HMRC however, requires that records used to complete company tax returns must be kept for 6 years from the end of the accounting period to which the records relate.

To keep on the safe side and not risk prosecution for failing to keep adequate and accurate records, you should keep the following for at least 6 years:

  • record of goods and services bought and sold
  • record of income and expenditure
  • sales books
  • petty cash books
  • invoices and receipts
  • orders and delivery notes
  • contracts
  • till rolls
  • business bank account statements
  • VAT records
  • PAYE records for employees
  • record of assets and liabilities
  • statement of stock at the end of each financial year
  • record of dividend payments, if applicable.

Your records can be kept in digital format, paper based or a mix of both. What’s important is that they are organised in a way that means information is easy to find.