If you are self-employed as a sole trader or a partner in a business partnership, you are required to maintain suitable business records as well as separate personal income records for tax purposes.
For tax compliance, these business records must be kept for at least five years from the 31 January submission deadline of the relevant tax year. For instance, for the 2023-24 tax year, where online filing was due by 31 January 2025, you must retain your records until at least the end of January 2030. In some situations, such as when a return is filed late, you may be required to keep the records for a longer period.
As a self-employed individual, you should keep a record of the following:
- All sales and income
- All business expenses
- VAT records if you're VAT registered
- PAYE records if you employ anyone
- Records of your personal income
- Details of any grants received if you claimed using the Self-Employment Income Support Scheme (SEISS) due to coronavirus
You don't necessarily need to keep the original physical records. Most records can be stored in an alternative format, such as scanned copies, as long as they can be retrieved in a readable and uncorrupted format.
If any of your records are lost or unavailable, you must attempt to reconstruct them. If the figures are estimated or provisional, you must inform HMRC accordingly. Failing to keep proper or accurate records can result in penalties.
