Business
Record keeping for businesses and households: how long each document must be kept and the first day it may be shredded.
What the business tools work out
The Business tools take one piece of a firm's paperwork and set out what UK law says about it, with the rule named each time. The first is the document retention checker: pick a document and its date, and it returns the first day that document may be destroyed.
- It lists 11 kinds of business record, from company accounts and VAT invoices to payroll, minimum wage and right to work files.
- It also covers 4 kinds of private paper, such as Self Assessment records, receipts and deeds.
- Each result gives the period, the day it counts from, the last day to keep the document and whether a legal duty or a limitation period sets it.
What decides how long UK records are kept
Two different kinds of rule set the dates. A legal duty is a statute ordering a record to be kept, usually with a penalty for failing. A limitation period orders nothing, but it limits how long a claim can be brought, and the record stays useful as evidence until it ends.
Parliament sets the duties, mostly in tax law, and HMRC enforces them. A limited company keeps its accounting records for 6 years after its financial year, while a sole trader counts 5 years from the January filing deadline. Employers hold PAYE records for 3 years and National Minimum Wage records for 6 years. Company law adds its own shorter period, which the tax rule overrides.
Limitation periods come from the Limitation Act 1980: 6 years for a claim on a contract and 12 years for a deed. Scotland has its own rules of prescription. Neither kind of period stops HMRC looking further back where tax was lost through carelessness or on purpose.
How a yearly clear-out works
A clear-out on a fixed day each year takes only the records whose period has ended by then. A sole trader's records dated 31 December 2020 belong to the tax year whose return was due on 31 January 2022, so they may go from 1 February 2027. A company with a December year end clearing out on 1 January 2027 may let go of the accounts for 2020 and earlier.
Paper goes through a cross-cut shredder or a shredding service, so nothing can be read or pieced together again. Records that hold personal data also fall under the UK GDPR, whose storage limitation principle says such data is kept no longer than its purpose needs.
Scans and digital records count as records when they are complete and readable, and they follow the same periods as paper. Deleting them means the copies on backups and cloud storage too. An open enquiry, a late return or a compliance check keeps the affected records beyond their usual date.