HMRC Compliance Guide
Record Keeping for
Sole Traders
Sole Traders
If you run your own business — as a taxi driver, delivery driver, freelancer, or any self-employed trade — keeping accurate records is essential. Here is everything you need to know.
5 Yrs
Minimum records retention
£50k
MTD threshold from 2026
£100
Minimum late filing fine
Jan 31
Annual HMRC deadline
Who Is This For?
If You Run Your Own
Business — This Is For You
Business — This Is For You
Every sole trader and self-employed person in the UK needs to keep records. Here are the most common trades we work with.
Taxi Drivers
Delivery Drivers
CIS Builders
Freelancers
Barbers
Cleaners
Why It Matters
Why Record Keeping
Is So Important
Is So Important
Proper records are not just about staying compliant with HMRC. They help you understand your business, reduce your tax bill, and protect yourself if HMRC ever questions your return. Most sole traders who get into trouble with HMRC do so because their records were incomplete — not because they did anything dishonest.
01
Track income and expenses accurately
Know exactly what came in and went out throughout the year so nothing is missed at tax time.
02
Prepare your Self Assessment with confidence
Good records make your tax return straightforward and accurate. No guessing. No stress.
03
Comply with Making Tax Digital requirements
MTD requires digital records from April 2026. Being organised now means no last minute panic.
04
Avoid penalties and HMRC enquiries
Incomplete records are the most common reason HMRC opens a compliance check. Good records protect you.
What to Keep
What Records Should
You Keep?
You Keep?
Here is exactly what you need to keep as a sole trader. Split into income records and expense records.
Income Records
Receipts, invoices, or booking logs for all payments received
Records of all cash, card, or digital payments from customers
Bank statements showing all business related deposits
Platform earnings statements — Uber, Deliveroo, Amazon Flex etc
Expense Records
Fuel receipts and mileage logs for business miles driven
Vehicle maintenance, repair bills, and insurance payments
Mobile phone and internet bills used for business purposes
Work clothing, tools, equipment, and training course receipts
Business vs Personal Use
What Counts as
Business Use?
Business Use?
You can only claim expenses for the business portion of your costs. If you use something for both personal and business reasons you must split the cost fairly and only claim the business share.
Example
If you use your vehicle 70% for business and 30% privately, you can only claim 70% of your fuel, insurance, and maintenance costs as business expenses.
Mileage Log
Keep a Mileage Log
Every Trip
Every Trip
1
Record the date of every business trip
2
Note the start and end location of each journey
3
Record the distance driven in miles
4
Note the business purpose of each trip
5
Keep this log throughout the year — not just at tax time
Retention Rules
How Long Must You
Keep Your Records?
Keep Your Records?
HMRC requires you to keep all records for at least 5 years after the 31 January deadline of the relevant tax year. This applies to both digital and paper records.
5 Years
Minimum retention period required by HMRC
2025-26
Tax year 2025 to 2026
Records must be kept until at least 31 January 2032
2024-25
Tax year 2024 to 2025
Records must be kept until at least 31 January 2031
2023-24
Tax year 2023 to 2024
Records must be kept until at least 31 January 2030
Rule
The simple rule to remember
Always add 5 years and 10 months to the end of the tax year in question
Making Tax Digital
Digital Record Keeping
and MTD from 2026
and MTD from 2026
If your business income exceeds £50,000 per year from 6 April 2026, you must keep digital records and submit quarterly income tax updates under Making Tax Digital rules. Simple tools designed for sole traders make this straightforward. We will set everything up for you.
Digital records required
From April 2026 if income over £50,000
Quarterly submissions
4 updates per year sent to HMRC
We handle all of it
Software setup and all submissions included
How We Help
We Take Record
Keeping Off Your Hands
Keeping Off Your Hands
You run your business. We handle your records, your tax, and your HMRC compliance. Everything included in one fixed fee.
Clear guidance on what records to keep
We tell every client exactly what to send us and how to organise it.
Simple digital record keeping setup
We set up affordable digital solutions suited to a one person business.
Review records for all allowable expenses
We check every figure to make sure you are claiming everything you are entitled to.
Quarterly and annual tax submissions
We handle all HMRC submissions so record keeping never stresses you out.
Stop Stressing About Records
Let Us Handle
Everything
Everything
Do not let record keeping stress you out. Contact us for expert help tailored to your one person business. Fixed fee. Plain English. Real people.
Phone
WhatsApp
Address
Derby House, Suite 7, Preston PR2 8JE
