What Bookkeeping Records Must a Limited Company Keep for HMRC for 6 Years?

The 6 Year Rule Is Not Optional

If you run a limited company in the UK, HMRC requires you to keep your bookkeeping records for at least 6 years from the end of the accounting period they relate to. This is set out in the Companies Act 2006 and the Taxes Management Act 1970. It applies whether you use paper records, spreadsheets, or cloud accounting software like Xero, FreeAgent, or QuickBooks.

The 6 year clock starts from the end of the company's financial year. If your company's year ends on 31 March 2025, you must keep those records until at least 31 March 2031. That is the minimum. For some records, you may need to keep them longer.

As ICAEW qualified accountants, we see directors make two common mistakes: throwing records away too early, or keeping everything indefinitely without any system. Neither is right. You need a clear retention policy that meets HMRC's requirements without hoarding paper you will never need.

What Counts as a Bookkeeping Record for a Limited Company?

HMRC's definition of a statutory record is broad. It covers every document that supports the figures in your company accounts and corporation tax return (CT600). If HMRC opens a compliance check, they will ask to see these records. If you cannot produce them, you face penalties.

Here is what you must keep:

• Bank statements and paying-in slips for every business bank account. This includes savings accounts and foreign currency accounts.
• Sales invoices you issue to customers, plus credit notes and refund records. Each invoice must show your company name, address, VAT number (if registered), invoice date, unique invoice number, and a description of the goods or services.
• Purchase invoices you receive from suppliers, including receipts for petty cash purchases. For VAT-registered companies, you need the original VAT invoice to reclaim input tax.
• Bank and cash receipts including till rolls, card payment summaries (from Stripe, PayPal, SumUp, Worldpay, etc.), and cash register tapes.
• Expense records including receipts for travel, subsistence, entertainment, and any other business expense. HMRC expects to see the original receipt, not just a credit card statement.
• Payroll records including P32 summaries, P60s for each employee, P45s for leavers, P11D forms for benefits in kind, and the P11D(b) for Class 1A National Insurance. You also need the payroll reports from your software (BrightPay, Iris, or the HMRC Basic PAYE Tools).
• Dividend vouchers showing the date, amount, and tax credit for every dividend paid to shareholders. These must be kept with the board minutes authorising each dividend.
• Director's loan account statements showing all transactions between the company and its directors. If HMRC checks whether a loan has triggered S455 tax (33.75%), they will ask for these.
• VAT records if you are VAT registered. This includes your VAT returns (VAT100), VAT1 registration certificate, VAT484 if you changed details, and the underlying sales and purchase ledgers. You must keep these for 6 years too.
• Construction Industry Scheme (CIS) records if you work in construction. This includes CIS300 monthly returns, subcontractor verification details, and deduction statements.
• Corporation tax working papers including the CT600 return, computations, and any supporting schedules. If you claimed R&D tax credits, keep the R&D AIF (Additional Information Form) and the technical report.
• Statutory registers including the register of members, register of directors, register of people with significant control (PSC), and minutes of board meetings and AGMs.

That is a long list. The key point is this: if it touches the company's finances, keep it for 6 years.

When the 6 Year Rule Starts and Ends

The 6 year period runs from the end of the accounting period the record relates to. For a company with a 31 December year end, records for the year ended 31 December 2024 must be kept until at least 31 December 2030.

There are two exceptions where you need to keep records longer:

• If HMRC opens a compliance check before the 6 years expire, you must keep the records until the check is resolved, even if that goes beyond the 6 year mark.
• If you file your corporation tax return late, HMRC can ask for records up to 6 years from the date the return was actually filed, not the year end.

For practical purposes, keep everything for a full 6 years plus 6 months from the year end. That gives you a safety margin.

Paper vs Digital Records: What HMRC Accepts

HMRC accepts digital records. You do not need to keep paper originals if you have a reliable digital copy. The key requirement is that the digital copy is complete and legible.

Most cloud accounting software (Xero, FreeAgent, QuickBooks) stores your invoices, bank transactions, and receipts automatically. If you use Dext or a similar receipt capture app, scanned receipts are acceptable. HMRC's own guidance says you can keep records electronically as long as they are accessible and readable.

That said, do not rely solely on your accounting software's database. Export your data annually as a backup. A CSV or PDF export of your nominal ledger, sales ledger, and purchase ledger is a sensible minimum. Store it on a cloud drive (Google Drive, OneDrive, Dropbox) or an encrypted external hard drive.

If you use paper records, store them in a fireproof filing cabinet or a secure offsite location. A damp garage or a loft full of mice is not a compliant storage solution.

What Happens If You Don't Keep Records for 6 Years?

HMRC can impose penalties for failing to keep adequate records. The penalties are:

• Up to £3,000 per accounting period for failing to keep records. This is set out in Schedule 24 of the Finance Act 2007.
• Higher penalties if HMRC believes the failure was deliberate or concealed. These can reach 100% of any tax understated.
• Daily penalties of up to £60 per day if HMRC issues a notice to produce records and you do not comply.

In practice, HMRC rarely issues the maximum penalty for a first offence where records are simply missing. But if you cannot produce records during a compliance check, HMRC can estimate your tax liability. Those estimates are rarely in your favour.

For example, imagine HMRC opens a check on your 2022/23 corporation tax return. You cannot produce purchase invoices for £40,000 of claimed expenses. HMRC disallows the entire £40,000. Your corporation tax bill goes up by £7,600 (at 19%) plus interest and possibly penalties. That is an expensive filing cabinet gap.

What About GDPR and Data Retention?

The 6 year retention rule sits alongside GDPR requirements. Under UK GDPR, you must not keep personal data longer than necessary. But HMRC's legal obligation to keep financial records for 6 years overrides the GDPR right to erasure for those specific records.

You can delete personal data that is not part of your statutory records after the 6 year period ends. For example, you can delete old employee HR files (CVs, interview notes) after the recruitment process, but you must keep their payroll records for 6 years.

Practical Tips for Managing Your 6 Year Retention

Here is how to organise your bookkeeping records so you meet HMRC's requirements without drowning in paper:

• Use cloud accounting software. Xero, FreeAgent, and QuickBooks all store records indefinitely. You can tag, search, and export anything HMRC asks for.
• Scan everything. If you receive paper invoices, scan them into Dext or a similar tool and upload them to your software. Then you can shred the paper after the 6 years are up.
• Label your digital files clearly. Use a consistent naming convention: "2024_03_31_Invoice_1234_ClientName.pdf". That makes finding records for a specific year straightforward.
• Set a calendar reminder. 6 years and 1 month after each year end, review the records for that year. If no HMRC check is open, you can securely delete or shred them.
• Keep statutory registers separately. Your register of members, directors, and PSC register must be kept at your registered office or SAIL address. These are not subject to the 6 year rule in the same way, but you should keep them for the life of the company.

What to Do at the End of the 6 Year Period

Once the 6 year retention period has passed and no HMRC compliance check is open, you can destroy the records. For paper records, use a confidential shredding service. For digital records, delete them permanently from your cloud storage and any backups.

However, check whether any other legal or contractual obligation requires you to keep records longer. For example, if you have a loan agreement with a bank that requires 10 years of records, the 6 year HMRC rule is your minimum, not your maximum.

If you are unsure whether a specific record can be destroyed, keep it. The cost of storing a few extra files is far lower than the cost of a penalty.

How We Help Our Clients Stay Compliant

At Holloway Davies, we help limited company directors set up their bookkeeping systems so they meet HMRC's 6 year retention rule without unnecessary admin. We work with Xero, FreeAgent, and QuickBooks to ensure your records are complete, accessible, and backed up.

If you are a director who wants to know exactly what records you need to keep and how to organise them, get in touch with our team. We can review your current record-keeping setup and tell you if anything is missing.

For more guidance on bookkeeping and compliance, read our bookkeeping and compliance blog or explore our full range of services for limited companies.