Records Sole Traders Need to Keep

Introduction

Good record keeping is essential for every sole trader. Not only does it help you complete an accurate Self Assessment tax return, it also ensures you have the evidence HMRC may request in the event of a compliance check.

In this guide, we explain which records you must keep, how long you need to store them, what counts as valid evidence, and why proper documentation matters.

What Records HMRC Requires

HMRC expects sole traders to keep clear and accurate business records that show:

Sales and income

You must keep documentation relating to:

invoices and receipts you issue
bank transfers received
cash sales
e-commerce sales or platform payouts
remittance advices from marketplaces or agencies

Even if your clients pay in cash, you must record the amounts and dates.

Business expenses

For every allowable business expense you claim, you need supporting records such as:

receipts
invoices
online purchase confirmations
mileage logs
statements showing card or bank payments

HMRC does not require you to submit receipts with your tax return — but you must keep them in case they request evidence later.

Bank statements

Bank statements help support the figures on your return and show the flow of money in and out of your business.

If you use a personal account for business transactions (common for early-stage sole traders), that’s allowed — but make sure business income and costs are clearly identifiable.

Mileage logs

If you claim mileage using HMRC’s simplified rates, keep:

a log of business journeys
dates, distances and purposes of trips

You cannot claim mileage for private travel or commuting.

How Long You Must Keep Records

Standard rule — 5 years

HMRC requires sole traders to keep business records for five years after the 31 January submission deadline.

Example:
For the 2023–24 tax year (due by 31 January 2025), keep records until 31 January 2030.

If HMRC opens an enquiry

If HMRC begins a compliance check, they may ask for older records — keeping them organised ensures you’re prepared.

Digital vs Paper Records

Digital records are fully acceptable

HMRC allows digital copies of documents, including:

scanned receipts
photos taken on your phone
PDF invoices
digital statements

As long as the document clearly shows the relevant details (date, amount, supplier, etc.), digital storage is perfectly valid.

What counts as valid evidence?

A valid record should show:

what was purchased
the date
the amount
who provided the goods or service

Handwritten notes alone are not usually sufficient unless the purchase was cash-only and no receipt was available — in which case, record details immediately.

Why Good Records Matter

Supporting your Self Assessment

Accurate records make it easier to:

calculate your income
claim allowable expenses
avoid errors or omissions
reduce your tax bill legally and correctly

Avoiding penalties

If HMRC contacts you for evidence, you must provide it.
Poor or missing records can lead to:

penalties
disallowed expenses
amended tax calculations

Peace of mind

Having everything organised reduces stress at tax time and prepares you for any compliance checks.

How QTax Helps

QTax supports you during Phase 1 by:

helping you understand what income and expenses you’ll need to report
guiding you through categories of claimable expenses
flagging anything unusual before you submit
storing your submitted tax return securely for future access

QTax keeps things simple while ensuring your return aligns with HMRC requirements.

FAQs

Do I need a separate business bank account?

Not legally — but it makes record keeping much cleaner. You can use a personal account as long as business transactions are clearly identified.

Do I need to upload my receipts to HMRC?

No. You keep them privately. HMRC will only request them during a compliance check.

Can HMRC check old records?

Yes. They can ask for records going back several years, particularly if they suspect an error.

Conclusion

Keeping good records doesn’t have to be complicated.
With organised documents and basic tracking of income and expenses, you’ll be well-prepared for your Self Assessment — and for any future questions HMRC may ask.

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