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The six-year rule for accounting records
Section 388 of the Companies Act 2006 requires private limited companies to retain accounting records for at least six years from the date they are made. Public companies must retain them for ten years. For a private company, this means that the underlying ledgers, invoices, bank statements, expense records, and payroll records for the year ended 31 December 2024 must be kept until at least 31 December 2030. This applies whether the records are paper or electronic.
The six-year period is a minimum. If HMRC has opened an enquiry into a period, or if litigation is pending, records must be retained until the matter is resolved, regardless of how long that takes.
HMRC retention requirements by record type
HMRC imposes its own retention obligations separately from the Companies Act, and the periods vary by record type. For Corporation Tax, business records must be kept for six years from the end of the accounting period to which they relate. For VAT, records (including the VAT account, purchase invoices, sales records, and import/export documents) must be kept for six years from the end of the VAT period. For PAYE and payroll, records must be retained for three years after the end of the tax year — so PAYE records for 2023/24 must be kept until 5 April 2027. Self-assessment records for a director's personal tax return must be kept for five years from the submission deadline.
- Corporation Tax records: 6 years from end of accounting period
- VAT records: 6 years from end of VAT period
- PAYE records: 3 years from end of tax year
- Capital gains records: indefinitely if an asset is still held
Records that must be kept indefinitely
Statutory registers — the register of members, PSC register, register of directors, and the register of charges — must be maintained for as long as the company is in existence. Minutes of board and shareholder meetings should also be retained permanently; the Companies Act requires them to be kept for ten years but best practice is permanent retention, as they may be needed to evidence historical decisions about share allotments, dividends, director appointments, or asset disposals that are relevant years later.
Property deeds, lease agreements, and intellectual property registrations should be retained for as long as the company holds the relevant asset, plus the limitation period for any claim (typically six years for contract disputes). Confirm your specific requirements with your solicitor or accountant.
Frequently asked questions
What happens if we cannot produce records that should have been kept?
HMRC can issue a penalty of up to £3,000 per accounting period where adequate records have not been kept. If records are unavailable during an enquiry, HMRC may raise estimated assessments based on their own calculations, which you would then need to challenge. Under the Companies Act, failure to maintain records is a criminal offence carrying a fine for each officer in default.
Can we destroy paper records once they have been digitised?
HMRC and Companies House accept digital records, but you should ensure your scanning process produces legible, complete images and that your storage system is backed up and reliable. Some original documents — deeds, wet-ink share certificates, court documents — may have legal significance that a scan cannot replicate. Take advice from your solicitor before destroying originals.
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