What records must a company keep, and for how long?
Record-keeping is a legal duty of directors, not an optional habit of tidy ones. The good news: kept digitally and continuously, it is nearly effortless. Here is what the law expects.
Two kinds of records
Company records cover the company itself: registers of directors and shareholders, people with significant control, minutes and resolutions, share transactions. Accounting records cover the money: every sale and purchase, assets and liabilities, stock where relevant, and enough detail to show the company's financial position at any time and to support the accounts you file.
What that means day to day
- Invoices issued and received, and receipts for expenses claimed
- Bank statements and reconciliations that tie the records to reality
- Payroll records for everyone employed, including pay, deductions and statutory payments
- VAT records and returns, kept digitally under Making Tax Digital if you are VAT registered
- Records behind one-off events: asset purchases, loans, dividends declared
How long to keep everything
The practical rule for a limited company is six years from the end of the financial year the records relate to, which satisfies HMRC's expectations for Corporation Tax and VAT. Keep records longer where they are still live: anything relating to an asset you still own, a transaction spanning multiple years, or a period under enquiry. When in doubt, keep it; storage is cheap and reconstruction is not.
Digital is fine, chaos is not
Records can be kept electronically, and photographing receipts into accounting software at the moment of spending is both compliant and the single best record-keeping habit a business can adopt. What matters is that records are complete, legible and retrievable; a shoebox scanned into one enormous PDF is technically digital and practically useless.
This note is general guidance and retention needs can differ with circumstances. If your records would not survive an HMRC enquiry with dignity, talk to us before one happens.