As a company director, you have a legal responsibility to keep accurate and detailed company and accounting records. This includes everything from tax records about the company to broader financial information. While you can hire a professional, like an accountant, to manage your record-keeping, the ultimate responsibility rests with you.

So, how long do you need to hold onto these records? The general rule is six years, but the specifics can vary depending on the type of record and your circumstances.

What are the main record retention periods?

For most records, you must keep them for six years from the end of the last company financial year they relate to. However, different rules apply to different types of records:

• Limited Company Accounting Records: Must be kept for six years from the end of the financial year. While the Companies Act 2006 only requires a three-year period, the six-year rule from UK tax law takes precedence.
• VAT Records: Standard UK VAT records must be kept for six years. However, if your business uses the VAT One Stop Shop (OSS) or Import One Stop Shop (IOSS) schemes for sales to the EU, you must keep those records for 10 years.
• PAYE Records: Records related to payroll must be kept for three years from the end of the tax year they relate to.

For example, for a company accounting period that ends on 31 March 2024, you'll need to keep the records for that period until at least 31 March 2030.

You may need to keep records for longer than six years if:

• they show a transaction that covers more than one of the company's accounting periods
• the company has bought something it expects to last more than six years, like equipment or machinery (records must be kept for six years after the asset is disposed of)
• you submitted your Company Tax Return late
• HMRC has started a compliance check into your Company Tax Return – in this case, you must keep records until the check is complete, or even longer if required.

How should I store my company records?

The days of keeping your invoices, bank statements, and other bits of paper in a dusty old shoebox are well and truly over. Digital record-keeping is now the standard, making storage easier and cheaper while saving physical space.

This shift is driven by the government's Making Tax Digital (MTD) programme, which is digitising tax administration.

• MTD for VAT has been mandatory for all VAT-registered businesses since April 2022.
• MTD for Income Tax Self Assessment (ITSA) is being phased in. From April 2026, it will apply to sole traders and landlords with income over £50,000, with the threshold dropping to £30,000 in April 2027.

Under MTD, you must use compatible software to keep digital records and file your returns. A key requirement is the use of "digital links" to transfer data between different pieces of software (for example, from a spreadsheet to your accounting software). Manually copying and pasting data is not considered a digital link.

Whether your records are digital or physical, you must ensure they are securely stored and backed up to prevent data corruption, damage, loss, or theft.

Once the legal retention period is over, you shouldn't keep personal data for longer than necessary, in line with the UK GDPR's 'storage limitation' principle. You must securely destroy any records you no longer need to keep. For paper, this means incineration or cross-shredding, while digital records should be securely wiped or the hardware physically destroyed.

What happens if I don't keep proper records?

Failing to keep adequate records or not retaining them for the required period can lead to serious consequences. HMRC can issue penalties of up to £3,000 for each failure to keep proper records. In more serious cases, such as the deliberate destruction of records, you could also be disqualified from being a company director.

What else do I need to do as a Limited company director?

Keeping records is just part of the story; there are also a number of reporting deadlines and filing requirements you'll need to keep on top of. We've got a handy article that outlines the main things you'll need to file with HMRC and Companies House as a limited company director.

If you need further support with your obligations as a limited company director, check out the support and guidance we here at Crunch can offer you. We combine state-of-the-art online accounting software with unlimited support from real, expert accountants, so you're always able to access your accounts and get the advice you need for everything from your Company Tax Return to your annual Self Assessment.

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