Every UK business has to keep records, and the periods do not all match. Two different rules sit behind the number most people quote. Company law requires accounting records to be preserved for three years from the date they are made for a private company and six years for a public one; tax law requires a company to keep its records until the sixth anniversary of the end of the accounting period, longer where a return is late or an enquiry is open. The tax rule is the binding one in practice, so six years is the working minimum for a private company even though the Companies Act floor is three. Failing to keep proper accounting records carries a fine of £3,000 from HMRC or disqualification as a director. VAT records, payroll records and personal self assessment records each run on their own clocks, which is why "we keep everything for seven years" is the most common policy — a sensible convenience, but a policy, not proof that each statutory duty has been met.
What a company must keep
The obligation splits in two. Company records cover the corporate history: details of shareholders and the results of shareholder votes and resolutions, directors and secretaries, and any loans or mortgages secured on the company's assets. Accounting records cover the money: all sums received and spent, the assets the company owns, the debts it owes and is owed, and — for businesses holding inventory — stock records and the stocktakings they rest on.
The accounting records must be sufficient to show and explain the company's transactions, disclose its financial position with reasonable accuracy at any time, and allow the directors to prepare accounts that comply with the Act. That standard is higher than a bank statement and a shoebox: it means a trail from the transaction to the ledger to the accounts.
The six-year period runs from the end of the last financial year the records relate to, and it extends in defined situations — where a transaction spans more than one accounting period, where an asset was bought that is expected to last beyond the period, where the accounts were filed late, or where HMRC has opened a compliance check.
The other clocks
- VAT records — six years, including VAT account, invoices issued and received, import and export documentation, and the digital records and digital links required under Making Tax Digital;
- Payroll records — three years from the end of the tax year they relate to for PAYE purposes, though working time and holiday records carry their own, longer, requirements under employment law;
- Self assessment for the self-employed — at least five years after the 31 January filing deadline of the relevant tax year, which in practice means close to six years of trading records;
- Capital assets — for as long as the asset is held plus the relevant period afterwards, because the acquisition cost is needed to compute a gain that may arise decades later. Property acquisition documents are the classic case of records disposed of far too early;
- Company registers — the register of members is kept for the life of the company, at the registered office or a single alternative inspection location. Note what changed: since 18 November 2025 companies no longer keep their own registers of directors, directors' residential addresses, secretaries or people with significant control, that information being held at Companies House instead — and the option to keep those registers on the central register was withdrawn at the same time. Board minutes are retained for ten years from the meeting.
Digital records are records
Records can be kept electronically, and for VAT-registered businesses within Making Tax Digital they must be — with digital links between systems rather than manual re-keying between a spreadsheet and the return. Scanned copies are acceptable for most purposes provided the scan is complete and legible, which lets businesses dispose of paper. The exceptions to watch are documents where the original has independent legal significance: share certificates, executed deeds, and certain customs and import documents.
Two practical risks come with digital. The first is access — records held in an accounting package the business stops paying for are effectively destroyed, and cloud providers do not keep data indefinitely after cancellation. Export a full set before ending a subscription, including the general ledger detail rather than just the reports. The second is continuity across a system change: migrations routinely carry over balances but not the underlying transaction detail, leaving a business unable to answer a question about a year it no longer holds in readable form.
What goes wrong, and what it costs
The immediate cost of poor records is rarely the £3,000 fine. It is the assessment. Where records are inadequate, HMRC can assess tax to the best of its judgement — an estimate built from whatever evidence exists — and the burden of displacing that estimate falls on the taxpayer, who by definition lacks the records to do it. The same logic runs through a VAT inspection, an employer compliance review and a customs audit.
The second cost is transactional. A buyer's due diligence asks for six years of everything; a business that cannot produce it either accepts a price reduction, a wider warranty, or a retention. That is a real number attached to a filing habit.
A policy worth having
The workable version is short: keep everything for seven years from the end of the accounting period, which comfortably covers the six-year tax rule without having to reason about it each time; keep property, share and capital asset documents permanently; keep statutory registers and minutes for the life of the company; and destroy on a schedule rather than at random, with a record of what was destroyed and when. Data protection cuts the other way — personal data should not be kept longer than necessary — so a retention schedule that names the categories and their periods does double duty.
Then test it once: pick a transaction from four years ago and see how long it takes to produce the invoice, the ledger entry and the bank item. If the answer is more than a few minutes, the policy exists on paper only.
Acumon sets up record-keeping and the systems behind it through cloud accounting and bookkeeping services, and deals with the consequences where records are already incomplete — including HMRC enquiries built on estimated assessments. The cheapest year to fix this is the current one.