What Records HMRC Wants, and How Long to Keep Them

Nobody starts a trade business because they enjoy filing. But record keeping is the one bit of admin with a legal minimum attached, and the one where being casual costs real money — in disallowed expenses, in penalties, and in the week of your life you spend every January reconstructing a year from a carrier bag.

The rule is short: keep a record of everything that comes in and goes out, with the evidence behind it.

What you have to keep

For a self-employed tradesperson, that means:

All sales and income. Invoices you raised, cash jobs, card payments, anything that landed.
All business expenses. Receipts, merchant invoices, subcontractor payments, fuel, insurance, subscriptions.
VAT records, if you are registered, in the detail the VAT rules require.
CIS statements, if you work under the Construction Industry Scheme. These are your proof of tax already deducted.
PAYE records, if you employ anyone.
Bank statements for the account the business runs through.
Records of anything bought for lasting use — the van, the machinery — and what you paid.
Mileage, journey by journey, if you claim it.

Cash jobs are not an exception. Income is income whether it arrived by transfer or in twenties.

How long to keep it

For the self-employed the rule is at least five years after the 31 January filing deadline for that tax year. In practice, a return filed in January 2027 for 2025–26 means keeping those records until early 2032.

That is the minimum, and there are reasons to keep things longer:

VAT records: six years.
If you file late or HMRC opens an enquiry, the clock runs differently and longer.
Anything about an asset you still own — keep it while you own it and for the period after you sell it, because the purchase price decides the tax when it goes.
Guarantees and certificates, for as long as the guarantee runs. That is not an HMRC requirement, it is a you requirement, for the day a customer rings about a boiler you fitted in 2024.

What "digital" means now

Under Making Tax Digital the records themselves have to be kept digitally, and the updates you send have to come out of that digital record. That is the part people miss: it is not enough to keep paper all year and type a total into software at the end.

The chain has to hold from the individual transaction to the figure you submit. HMRC calls this digital linking, and it is why a photographed receipt with the amount recorded in software satisfies the rule, and a spreadsheet total typed in from memory does not.

Which businesses are in, and from when, is set out in our guide to MTD. The short version: VAT-registered businesses are already there, and Income Tax follows by turnover.

A photograph of a receipt is a valid record. The paper original is not required once you hold a legible copy.

The habit that replaces the shoebox

One rule, and it is the only one that survives a busy week: capture the record where the money moves.

At the merchant's counter, photograph the receipt before it goes in your pocket. Thermal paper fades to blank in a year — sometimes in a hot van by August.
Put the cost against the job while you still remember which job it was.
Record mileage at the end of the day, not the end of the year.
Raise the invoice the day you finish.

Four seconds each time is about twenty minutes across a year. The January alternative is a week.

Keep the business account separate

You are not legally required to have a business bank account as a sole trader, but one account for the business is worth more than any filing system. It gives you a second, independent record of every transaction, it makes the year end straightforward, and it stops the argument about whether the Sunday shop was materials or a barbecue.

What if a receipt is missing?

It happens, and it is not a disaster. Claim what you genuinely spent and support it with whatever you have: the bank line, the merchant's account statement, an email confirmation, a photograph of the job showing the materials.

A missing receipt weakens one expense. A missing habit weakens the lot, because a return with no records behind it is the one that turns a routine question into an enquiry.

What you must not do is invent one.

The years already in the carrier bag

Do not try to fix everything at once. Work backwards:

Set up the habit from today, so the pile stops growing.
Get the current tax year complete and digital first.
Then scan the older years that are still within the five-year window, oldest deadline first.

What good records are actually for

HMRC is the reason you have to keep them. It is not the reason they are worth keeping.

Records tied to jobs tell you which work makes you money, where your quotes are wrong, and what your materials really cost. That is the same data, filed once, answering two questions instead of one.

How Nule helps

Receipts photographed and attached to the transaction, on site.
Every cost categorised as it is entered, and linked to a job.
Mileage logged per journey.
Digital records that feed the quarterly update, with the chain intact from receipt to submission.

This is general information, not advice about your circumstances. Check the current requirements on gov.uk, and ask an accountant about anything unusual.