The five year rule

Keep your records for at least five years after the 31 January submission deadline of the relevant tax year. For the 2025/26 year, with its 31 January 2027 deadline, that means keeping everything until 31 January 2032 at the earliest.

If you file a return more than four years late, different rules apply: keep the records for 15 months after you actually send it.

What you have to keep

GOV.UK’s list:

• all sales and income
• all business expenses
• VAT records, if you are registered
• PAYE records, if you employ people
• records of your personal income
• any grants you claimed, including Self-Employment Income Support Scheme payments

The proof behind the numbers matters as much as the numbers. That means receipts for goods and stock, bank statements, sales invoices, till rolls. You can keep them digitally. A photographed receipt in a folder on your phone beats a faded slip in a carrier bag.

You do not send any of this in with the return. You keep it so you can work out your profit, and so you have something to show HMRC if it asks.

Cash basis or traditional accounting

From the 2024/25 tax year, cash basis is the default for sole traders. You record income when the money arrives and expenses when you pay them. Invoice someone on 15 March and get paid on 30 April, and the income belongs to the later tax year. You have to opt out if you want traditional accounting, where income and expenses follow the invoice dates instead.

Traditional accounting means keeping extra records: what you are owed but have not been paid, what you owe but have not paid, and the value of your stock at the year end.

Making Tax Digital changes the how, not the what

If you are in Making Tax Digital for Income Tax, the same records must be kept digitally in compatible software, with quarterly updates sent to HMRC. Paper alone stops being an option.

Why it matters

HMRC can check your records to make sure you are paying the right tax. A check goes badly for the person with no receipts, not the person with a boring, complete folder.

Sources

All pages checked 20 October 2026.

• Business records if you’re self-employed: https://www.gov.uk/self-employed-records
• What records to keep: https://www.gov.uk/self-employed-records/what-records-to-keep
• How long to keep your records: https://www.gov.uk/self-employed-records/how-long-to-keep-your-records
• Send quarterly updates (MTD): https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/send-quarterly-updates

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