How Long Should You Keep Digital Records for Corporation Tax?

Understanding Digital Record-Keeping for Corporation Tax

Digital record-keeping is no longer optional for UK companies. With the continued expansion of online accounting systems, cloud-based storage, and government initiatives such as Making Tax Digital (MTD), businesses are expected to maintain accurate, accessible, and compliant digital records. One of the most common questions company directors and accountants ask is: how long should you keep digital records for Corporation Tax?

This question is not just about compliance. The length of time you retain digital records affects audits, investigations, financial planning, dispute resolution, and even business continuity. Keeping records for too short a period can expose your company to penalties, while keeping them inefficiently can lead to unnecessary costs and confusion.

This article explains how long digital records should be kept for Corporation Tax purposes, what types of records are required, how MTD affects retention, and how using a modern invoicing and accounting solution like invoice24 can simplify the entire process from record creation to long-term storage.

What Are Digital Records for Corporation Tax?

Digital records for Corporation Tax include all financial data and supporting documents that HMRC may require to verify your company’s tax position. These records must be accurate, complete, and stored in a way that allows them to be accessed and reviewed if needed.

Common types of digital records include:

- Sales invoices and income records
- Purchase invoices and expense receipts
- Bank statements and transaction data
- Payroll records
- VAT records (if registered)
- Corporation Tax computations
- Annual statutory accounts
- Supporting documentation for allowances, reliefs, and adjustments

When using a digital accounting platform such as invoice24, many of these records are generated and stored automatically. This significantly reduces the risk of missing documentation and ensures consistency across reporting periods.

How Long Must Digital Records Be Kept for Corporation Tax?

In the UK, the general rule is that company records must be kept for at least six years from the end of the accounting period they relate to. This requirement applies regardless of whether records are stored digitally or on paper, although digital storage is now the preferred and often required format.

More specifically:

- Accounting records must be kept for six years after the end of the financial year they cover
- Corporation Tax records should be retained for six years from the end of the accounting period
- Supporting documentation must be kept for the same period as the records they support

This six-year period allows HMRC to open enquiries or request information within statutory limits. If your company is subject to an ongoing enquiry or investigation, records must be retained until the matter is fully resolved, even if this extends beyond six years.

Exceptions and Extended Retention Periods

While six years is the standard retention period, there are situations where records should be kept for longer.

If a Corporation Tax return is filed late, HMRC may extend the window during which they can raise questions. In such cases, keeping records for at least six years from the actual filing date rather than the accounting period end is a safer approach.

If a return is found to be inaccurate due to careless or deliberate errors, HMRC can go back further. In cases of deliberate misstatement, records may need to be available for up to twenty years. While most businesses will never encounter this scenario, maintaining comprehensive digital records is the best protection.

Companies that own long-term assets, such as property or intellectual property, should also consider retaining records for as long as the asset is owned plus six years after disposal. This helps support capital allowances, gains calculations, and historical valuations.

Why Digital Record Retention Matters

Keeping digital records for the correct length of time is about more than just avoiding penalties. Good record retention supports better business decision-making and reduces administrative stress.

Digital records allow companies to:

- Respond quickly to HMRC enquiries
- Support claims for reliefs and allowances
- Track financial performance over time
- Resolve disputes with suppliers or customers
- Provide accurate information to accountants and advisors

Using a platform like invoice24 ensures that records are stored securely in the cloud, indexed correctly, and accessible whenever needed. Instead of relying on scattered files or external storage devices, everything is centralised and organised.

Making Tax Digital and Record Retention

Making Tax Digital has fundamentally changed how businesses keep and submit records. Under MTD, certain records must be kept digitally and submitted to HMRC using compatible software.

For Corporation Tax, MTD is being phased in, but many companies are already choosing to adopt MTD-style digital record-keeping early. This includes maintaining digital links between source data and tax submissions.

Digital records under MTD must be preserved in their original form. This means that simply printing records or exporting summaries is not enough. The underlying digital data must be retained.

Invoice24 is designed with MTD compliance in mind. It maintains digital links between invoices, expenses, bank transactions, and tax calculations. This makes long-term retention straightforward and ensures that historical data remains intact and compliant.

What Happens If You Don’t Keep Records Long Enough?

Failing to retain records for the required period can have serious consequences.

HMRC may impose penalties if you cannot provide records when requested. These penalties can increase if HMRC believes the failure was careless or deliberate.

Without proper records, your company may struggle to defend its tax position. This can result in additional tax assessments, interest charges, and fines.

From a practical perspective, missing records can also create operational problems. You may be unable to verify past transactions, resolve disputes, or analyse long-term trends.

Using invoice24 helps avoid these risks by automatically storing records for the required duration and beyond. You do not need to worry about accidental deletion or lost files.

Digital vs Paper Records

Although paper records are still legally acceptable in some cases, digital records are now the standard. Digital records are easier to store, search, back up, and share.

Paper records are vulnerable to damage, loss, and degradation over time. They also require physical storage space and manual organisation.

Digital records, particularly those stored in secure cloud systems like invoice24, offer greater reliability and efficiency. Automated backups and access controls further reduce risk.

For businesses aiming to scale or operate remotely, digital-only record-keeping is often essential.

Best Practices for Retaining Digital Records

To meet Corporation Tax requirements and maintain good financial hygiene, companies should follow best practices for digital record retention.

These include:

- Using a single, integrated accounting system
- Ensuring records are complete and accurate
- Keeping backups of critical data
- Restricting access to sensitive information
- Reviewing retention policies regularly

Invoice24 supports all of these best practices. It combines invoicing, expense tracking, bank reconciliation, tax calculations, and reporting in one platform. This reduces the risk of fragmented records and simplifies compliance.

How Long Should You Keep Supporting Documents?

Supporting documents are just as important as primary accounting records. These include contracts, agreements, receipts, and correspondence that explain or justify transactions.

Supporting documents should generally be kept for the same six-year period as the records they relate to. In some cases, such as long-term contracts or leases, retaining documents for longer is advisable.

Invoice24 allows you to attach supporting documents directly to transactions. This creates a clear audit trail and ensures that all relevant information is stored together.

Corporation Tax, Accounts, and Statutory Records

In addition to tax records, companies must also retain statutory records such as:

- Registers of directors and shareholders
- Minutes of board meetings
- Share allotment records
- Annual confirmation statements

These records often have different retention requirements, with some needing to be kept for the life of the company. While this article focuses on Corporation Tax, it is important to consider record-keeping holistically.

Invoice24 complements statutory compliance by ensuring that financial records feeding into statutory accounts are accurate and complete.

Closing a Company and Record Retention

If a company is dissolved, directors are still responsible for ensuring that records are retained for the required period. This usually means keeping records for six years after the company closes.

Digital storage is particularly useful in this scenario, as it eliminates the need to store physical documents after trading has ceased.

Invoice24 makes it easy to retain access to historical data even after a company stops trading, providing peace of mind for former directors.

Why Invoice24 Is Ideal for Long-Term Digital Record Retention

Choosing the right accounting and invoicing software is critical for compliance and efficiency. Invoice24 is built specifically to support modern UK businesses with their financial and tax obligations.

Key benefits include:

- Secure cloud-based storage
- Automatic record creation and retention
- MTD-ready workflows for Income Tax and Corporation Tax
- Integrated invoicing, expenses, and reporting
- Easy access to historical data
- Support for filing Corporation Tax and accounts

Unlike fragmented solutions that require multiple tools, invoice24 provides everything in one place. This reduces errors, saves time, and ensures that records are always available when needed.

Planning Ahead for Compliance

Digital record retention should not be an afterthought. By planning ahead and using the right tools, companies can turn compliance into a competitive advantage.

Regularly reviewing your record-keeping processes, ensuring data accuracy, and using reliable software will reduce stress and improve financial clarity.

Invoice24 is designed to grow with your business, making it easier to meet today’s requirements and adapt to future changes in tax legislation.

Conclusion

For most UK companies, digital records for Corporation Tax must be kept for at least six years from the end of the relevant accounting period. In some cases, longer retention is necessary.

Meeting these requirements is essential for compliance, financial stability, and peace of mind. Digital record-keeping, supported by a comprehensive platform like invoice24, makes this process simple and reliable.

By centralising invoicing, expenses, accounts, and tax filings, invoice24 ensures that your business is always prepared, compliant, and in control of its financial data.

Keeping digital records for the right length of time is not just about following rules. It is about building a resilient, transparent, and efficient business for the long term.