How long do I need to keep business records as a sole trader?

Keep your business records for at least 5 years after the 31 January filing deadline. For the 2025-26 tax year, due online by 31 January 2027, that means until at least the end of January 2032.

The rule is the same for sole traders and landlords, and Making Tax Digital (MTD) does not change it. What counts as "records" is wider than most people think. The rules below follow GOV.UK and the Taxes Management Act 1970 as checked on 16 October 2026.

The 5-year rule, with dates

The legal duty is in section 12B of the Taxes Management Act 1970. If you run a business, you keep records until the fifth anniversary of 31 January after the end of the tax year.

Two things make it longer:

• HMRC is checking your return. If HMRC opens an enquiry, you keep the records until it is finished, even if that is after the date above.
• Very late returns. If you send a return more than 4 years after the deadline, GOV.UK says you keep the records for 15 months after you send it.

A simple habit covers the normal case: keep at least the last 6 complete tax years.

Landlords too

For record-keeping, section 12B says a person letting property is treated as carrying on a trade. So the same 5-year rule applies to your rent statements, agent statements, repair invoices and mortgage interest statements. Someone with no business or letting income, only savings interest, for example, has a shorter period of 1 year after 31 January.

What to keep

GOV.UK lists all sales and income, all business expenses, VAT records if you are registered, PAYE records if you employ anyone, and records of your personal income. The proof behind them includes receipts, bank statements and sales invoices.

For tradespeople, a few records matter more than most:

• CIS payment and deduction statements. GOV.UK says to keep them, as HMRC might ask for evidence of your deductions. The law is stricter here than for other records: you must keep the statement itself, on paper or as a scan or PDF, not just the figures copied into your software. If you lose one, ask the contractor for a replacement.
• Mileage logs, if you claim the flat mileage rate for your van.
• Invoices for tools and equipment, which may need to back up a claim years later.

Under Making Tax Digital

GOV.UK says MTD digital records must be kept for at least 5 years after the 31 January submission deadline, the same as Self Assessment. You also keep the original records or copies that the digital records came from, such as invoices and bank statements. The software entry does not replace the receipt.

If you change software, make sure you can still get at old records. The duty to keep them is yours.

The penalty

Under section 12B, failing to keep or preserve the records you need for a tax year can lead to a penalty of up to £3,000. If records are lost, stolen or destroyed and cannot be replaced, GOV.UK says you must do your best to provide figures, and tell HMRC on the return whether they are estimated or provisional.

What this means for you

The records for your 2025-26 return, which you may be filing now, must be kept until at least the end of January 2032. Records from 2019-20 and earlier, with an online deadline of 31 January 2021 or before, have passed the 5-year mark, unless HMRC is looking at that year or you filed very late.

Keeping records also helps you. If you find a mistake, a return can be amended within 12 months of the deadline, and you need the paperwork to do it. Our guide to amending a tax return explains how.

Steps to keep your records safe

1. Keep one folder, paper or digital, for each tax year from 6 April to 5 April.
2. Photograph or scan receipts as you go, and keep PDFs of CIS statements and agent statements.
3. Back up anything stored only on a phone or laptop.
4. Before deleting a year, check it is more than 5 years past its 31 January deadline and that no HMRC check is open.
5. If something is lost, ask the supplier, contractor or agent for a copy.

Our guide to records for Making Tax Digital covers what to record. The free MTD check shows when MTD starts for you. There is more in the trades section and the landlord section.