Keeping business records as a sole trader: what to keep and for how long

Last checked 19 October 2026

Good records are the quiet foundation of a sole trader business. They make your tax return quicker, help you see how the business is doing, and they’re what HMRC asks to see if it checks your return. GOV.UK’s Become a sole trader guide says you must keep records from when you start trading. This guide explains what to keep, how long for, and a simple routine that keeps it manageable.

Why records matter

GOV.UK’s Business records if you’re self-employed guide says you don’t send your records in with your tax return, but you need to keep them so you can:

• work out your profit or loss for your tax return
• show them to HMRC if asked

It also says you must make sure your records are accurate and that you can identify business transactions.

What to keep

GOV.UK says you’ll need to keep records of:

• all sales and income
• all business expenses
• VAT records, if you’re registered for VAT
• PAYE records, if you employ people
• records about your personal income
• any grants you claimed through the Self-Employment Income Support Scheme

Proof to hang on to

GOV.UK lists these types of proof:

• receipts for goods and stock
• bank statements and chequebook stubs
• sales invoices, till rolls and bank slips

Photos or scans of receipts are a common way to stop paper fading or going missing. If you’ll use Making Tax Digital for Income Tax, HMRC’s Create digital records guidance says you still need to keep the original records or supporting documents, or copies of them, that you use to prepare your tax return.

Cash basis or traditional accounting

GOV.UK says you’ll need to choose an accounting method, and that from the 2024 to 2025 tax year, cash basis is the default. You must opt out if you want to use traditional accounting.

	Cash basis	Traditional accounting
When income is recorded	When you receive the money	By the date you invoice
When expenses are recorded	When you pay the bill	By the date you’re billed
Extra records	None beyond the standard records	What you’re owed, what you owe, stock and work in progress, year-end bank balances, money put in and taken out

Source: Business records if you’re self-employed (GOV.UK).

GOV.UK gives an example of cash basis: if you invoiced someone on 15 March 2024 but weren’t paid until 30 April 2024, you record the income on 30 April 2024, in the 2024 to 2025 tax year. Some businesses can’t use cash basis, and GOV.UK’s cash basis guide lists who. Which method suits you is a question for an accountant.

Choosing your record dates

GOV.UK says that if you prepare accounts, you choose the dates your records run to and from, usually the same dates each year. It may be simpler if they match the tax year, 6 April to 5 April, because HMRC works out tax on the tax year. If you don’t prepare accounts, GOV.UK says you record income and expenses for each tax year.

How long to keep records

GOV.UK says you must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year.

GOV.UK adds that if you send a tax return more than 4 years after the deadline, you’ll need to keep your records for 15 months after you send it.

If records are lost, stolen or destroyed

GOV.UK says that if you can’t replace your records, you must do your best to provide figures. Tell HMRC when you file your tax return if you’re using:

• estimated figures, your best guess when you can’t provide the actual figures
• provisional figures, temporary estimates while you wait for the actual figures, which you’ll need to send once you have them

Keeping a backup, such as cloud storage or a second copy of your files, makes this much less likely to matter.

A simple weekly routine

There’s no official routine, but many sole traders find little and often works better than a year-end panic:

1. Once a week, match money in and out of your business bank account against invoices and receipts.
2. Snap receipts straight away, and note what each one was for.
3. Send invoices as soon as a job is done, and note when each is paid.
4. Once a month, check for unpaid invoices and chase them. Our guide to clients who pay late has a chasing routine.
5. Once a quarter, look at your totals so far. If you’ll be using MTD, this lines up with your quarterly updates.

A separate account makes the weekly check quicker. GOV.UK says you might be able to use a personal or business bank account, and to check with your bank which you can use. Our guide to a separate business bank account covers the options.

What changes under Making Tax Digital

If your qualifying income is over £30,000 on your 2025 to 2026 tax return, GOV.UK says you’ll need to use Making Tax Digital for Income Tax from 6 April 2027. You’ll then create digital records of your self-employment income and expenses in compatible software. HMRC’s Create digital records guidance says each record needs the amount, the date and a category, and that digital records must be kept for at least 5 years after the 31 January submission deadline, the same as for Self Assessment.

Our guides to spreadsheets and bridging software and bookkeeping software for new sole traders explain the options.

Frequently asked questions

Do I need to keep paper receipts?

GOV.UK says to keep proof such as receipts. Under Making Tax Digital, HMRC says you must keep original records or supporting documents, or copies of them. Check HMRC’s guidance if you plan to keep copies only.

Do I send my records to HMRC?

No. GOV.UK says you don’t need to send your records in with your tax return, but you must keep them in case HMRC asks to see them.

How long do I keep records for?

At least 5 years after the 31 January submission deadline of the relevant tax year, according to GOV.UK.

Do I need accounting software?

GOV.UK’s records guide doesn’t say you need software for Self Assessment. If you’ll be using Making Tax Digital for Income Tax, you’ll need compatible software. Our MTD hub explains who that applies to.

Sources

All checked on 19 October 2026.

• Business records if you’re self-employed (GOV.UK)
• Become a sole trader (GOV.UK)
• Cash basis (GOV.UK)
• Create digital records (GOV.UK)
• Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK)