Doing your own limited company bookkeeping: what to keep

In short: Yes. The legal duty is the company's, not an accountant's: it must record all money received and spent, its assets, debts and year-end stock (GOV.UK: Company and accounting records: your responsibilities), and keep records for 6 years for HMRC. A spreadsheet can do the job, but a VAT-registered company must keep digital VAT records.

When the books are done, take the 30-second check to see whether Taxley fits your company, or find your filing dates with the Corporation Tax deadline calculator.

What records must a limited company keep in 2026?

A limited company must keep records that show and explain its transactions and its financial position at any time, under section 386 of the Companies Act 2006. In practice that means day-to-day entries for all money received and spent, a record of assets and liabilities, and year-end stock statements for a company dealing in goods.

HMRC sets a second, overlapping duty. A company that may have to deliver a Company Tax Return (CT600) must keep the records needed for a correct and complete return, including accounts, books, contracts, vouchers and receipts (Finance Act 1998, Schedule 18, paragraph 21). Failing to keep them can cost a penalty of up to £3,000 for each accounting period under paragraph 23, and GOV.UK adds that a director who does not keep accounting records can be disqualified. Neither duty says who must do the work, so a director can keep the books personally. For a small company, the records fall into eight groups:

• Sales: sales invoices, contracts, sales books and till rolls, with what each receipt was for (GOV.UK: Company and accounting records: your responsibilities).
• Purchases and receipts: supplier invoices, receipts, orders and delivery notes for money spent.
• Bank statements: every company bank account, card and loan, so each sum received and spent can be traced.
• Assets bought and sold: invoices and sale records for equipment, vehicles and other assets.
• Stock: year-end stock statements and the stocktake sheets behind them, for a company dealing in goods (s386(4)).
• Payroll: payments and deductions, reports and payments to HMRC, leave and sickness, tax codes, and taxable expenses or benefits (GOV.UK: PAYE and payroll for employers: Keeping records).
• Director's loan account: a record of any money a director borrows from or pays into the company (GOV.UK: Director's loans: Overview).
• Dividend vouchers and board minutes: a voucher for each dividend showing the date, company name, shareholders paid and amount, and minutes of the directors' meeting that declared it, even with one director (GOV.UK: Taking money out of a limited company).

How long do you have to keep company records in the UK?

Keep a limited company's accounting records for at least 6 years from the end of the last financial year they relate to, because that is HMRC's rule (GOV.UK: Company and accounting records: your responsibilities). Company law sets a shorter minimum of 3 years for a private company, so the 6-year Corporation Tax rule usually decides how long the books are kept.

Some records must be kept for longer than 6 years. GOV.UK lists four cases: a transaction that covers more than one accounting period, something the company expects to last more than 6 years such as equipment or machinery, a Company Tax Return sent late, and a compliance check HMRC has started into the return (GOV.UK: Company and accounting records: your responsibilities). Payroll records run on a different clock, which starts at the end of the tax year on 5 April rather than at the company's year end, and VAT records have their own 6-year minimum (GOV.UK: Charge, reclaim and record VAT: Keeping VAT records). For a financial year ending 31 March 2026, the ordinary 6-year point for the Corporation Tax records is 31 March 2032.

Should you keep the books in a spreadsheet or bookkeeping software?

A spreadsheet is enough for many small companies that are not VAT-registered, because company records may be kept in hard copy or electronic form, arranged as the directors think fit (Companies Act 2006 s1135). A VAT-registered company must follow Making Tax Digital for VAT unless exempt, which means digital VAT records and VAT Returns filed through software.

HMRC's VAT Notice says Making Tax Digital for VAT requires all VAT-registered businesses to keep records digitally and file their VAT Returns using software (VAT Notice 700/22). A spreadsheet still qualifies when bridging software links it to HMRC, but HMRC does not treat copying and pasting between programs as a digital link. Making Tax Digital does not reach Corporation Tax, as the guide to whether MTD applies to limited companies explains. Outside VAT, the choice comes down to volume: a spreadsheet with one row per bank transaction, giving the date, amount, customer or supplier and category, covers the day-to-day entries section 386 asks for, and software earns its subscription when bank feeds, invoice reminders or payroll save more time than they cost.

How do you keep the books yourself each month and at year end?

Keep the books in two rhythms: a monthly routine that records everything while the evidence is fresh, and a year-end routine that turns the records into a checked trial balance. Allow about an hour a month for steps 1 to 4; steps 5 to 8 happen once, at or just after the year end.

Step 1: Reconcile each bank account to its statement

Match every line on the bank statement to an entry in the books, then check that the balance in the books equals the statement balance on the same date. Do the same for any company credit card or loan account. A reconciliation proves nothing is missing or entered twice, and it gives you the record of all money received and spent that GOV.UK requires (GOV.UK: Company and accounting records: your responsibilities). Save each statement as a PDF in the year's folder.

Step 2: Categorise each transaction the way the accounts need it

Give every transaction a category that matches a line in the accounts: turnover, cost of sales, staff costs, premises, insurance, professional fees, other costs, interest, or a balance sheet item such as an asset, a loan, or VAT or PAYE paid to HMRC. Money a director takes that is not salary, a dividend or an expense repayment is a director's loan (GOV.UK: Director's loans: Overview), so post it to the director's loan account, not to expenses.

Step 3: Chase unpaid invoices and keep a list of what is owed

List every sales invoice still unpaid, chase the overdue ones, and keep the list current. GOV.UK names debts the company owes or is owed among the records to keep (GOV.UK: Company and accounting records: your responsibilities), and the list becomes the year-end debtors figure. Keep a matching list of supplier bills not yet paid, which become creditors. The guide to unpaid invoices at the company year end explains why cash is not profit.

Step 4: File each receipt and check it is a company expense

Keep the receipt or invoice for each payment, filed against its bank line with a note of what it was for: HMRC's record-keeping rule names vouchers and receipts (FA 1998 Sch 18 para 21). Then check the cost had only a business purpose, the "wholly and exclusively" principle, and is not specifically disallowed, as client entertaining is (GOV.UK: Company expenses you can deduct before paying Corporation Tax). The allowable expenses checklist covers the grey areas.

Step 5: Settle the director's loan account at the year end

Total the payments between director and company that were not salary, dividends or expense repayments, and agree the closing balance. In credit, the company owes the director; in debit, the director owes the company, and GOV.UK says either goes on the balance sheet (GOV.UK: Director's loans: Overview). A loan still owed at the year end is shown on form CT600A, and extra Corporation Tax is due on any part not repaid within 9 months (GOV.UK: Director's loans: If you owe your company money). See who owes whom on a director's loan account.

Step 6: Count stock and update the fixed asset list

On the last day of the financial year, count and value the stock the company holds: company law requires year-end stock statements, and the stocktake sheets behind them, from a company dealing in goods (Companies Act 2006 s386). Update the fixed asset list too, with each item bought or sold, the date, the price and the invoice. Depreciation is not normally deductible for tax and capital allowances take its place (HMRC CA10020), so the list is the evidence for the allowances.

Step 7: Produce a trial balance and tie it to the evidence

Run a trial balance at the year-end date: every account with its debit or credit balance, with the two columns totalling the same. Tie the main balances to evidence: cash to the bank statements, debtors to the unpaid invoice list, creditors to unpaid bills, VAT and PAYE to HMRC's figures, and the director's loan account to its reconciliation. Retained earnings brought forward should equal last year's balance sheet (GOV.UK: Prepare annual accounts for a private limited company). The trial balance import checklist goes further.

Step 8: Check the balance sheet balances before preparing the accounts

Check that net assets equal share capital plus reserves, and that retained earnings moved by this year's profit less dividends paid. Check no dividend exceeded available profits: GOV.UK says a company must not pay out more in dividends than its available profits from current and previous financial years (GOV.UK: Taking money out of a limited company). If the balance sheet does not balance, work through the balance sheet difference checklist before going further.

Where does each record end up in the accounts and the CT600?

Every record feeds a line in the annual accounts, and most then feed a box on the Company Tax Return. The table below is Taxley's own mapping for a trading company, with box numbers checked against HMRC's Company Tax Return guide, so you can see which missing record changes the tax and which only changes the balance sheet.

Record → accounts line → CT600 box (trading company; boxes from HMRC's guide, checked 26 September 2026)

The profit on the CT600 is not the profit in the accounts: GOV.UK says the profit or loss for Corporation Tax is different from the profit or loss shown in the annual accounts (GOV.UK: Company Tax Returns: Overview). Depreciation is added back and capital allowances are deducted instead: HMRC's guide puts main pool allowances in box 705, including any annual investment allowance (AIA) claimed on that pool, and the AIA also in box 690. Client entertaining is added back. Dividends never reduce taxable profit, because no deduction is allowed for a dividend or other distribution (Corporation Tax Act 2009 s1305). Box 480 takes its figure from box A80 of the CT600A, so an unreconciled director's loan account can change the bill. A property letting company's rent goes to box 190, income from a property business, instead of boxes 145 and 155.

How do your books become accounts and a CT600 with Taxley?

Taxley starts where the bookkeeping ends. You import a trial balance or type in the year-end figures, and Taxley builds the accounts and the Corporation Tax computation in iXBRL, files the CT600 with HMRC and files the accounts with Companies House.

The trial balance import reads CSV, Excel (.xlsx) or OpenDocument (.ods) files of up to 1 MB and 2,000 rows: a trial balance report exported from your bookkeeping software, or your own spreadsheet with account names and debit and credit (or balance) columns. Before anything changes, Taxley shows every account and the line it will go on, and you can move any account to a different line. A "last year" column fills last year's figures too. A director's loan account in debit goes to debtors and prompts the directors' loans question, because tax may be due if the loan isn't repaid within 9 months (GOV.UK: Director's loans: If you owe your company money). Older .xls files and macro-enabled workbooks are refused, so save the file as .xlsx or CSV first.

For a company's first Taxley return, last year's balance sheet figures are filled in from the accounts the company filed at Companies House when the draft is first opened, if those accounts were filed in a machine-readable format. Only empty boxes are filled, and an Undo button removes them. Taxley prepares micro-entity (FRS 105) or small company (FRS 102 Section 1A) accounts and, before you pay, its readiness checks stop a balance sheet that doesn't balance, missing last-year figures and some entries that HMRC's own CT600 business rules would reject. It files the CT600 with the company's own Government Gateway user ID and password, enrolled for Corporation Tax, and files the accounts with Companies House using the company's authentication code. GOV.UK says the two filings can be made together or separately (GOV.UK: Accounts and tax returns for private limited companies).

The monthly routine stays with you, because Taxley works from year-end figures rather than day-to-day transactions. GOV.UK says you can either get an accountant to prepare and file the tax return or do it yourself (GOV.UK: Company Tax Returns: Overview), and an accountant is worth paying for where Taxley stops: research and development (R&D) claims, audited or medium-sized companies, large companies paying by quarterly instalments, and the other cases listed on the do I need an accountant page. Whoever files, the directors stay responsible for the return. For a small company inside those limits, take the 30-second check to see whether Taxley fits your company.

Frequently asked questions

Is a trial balance the same as the annual accounts?

No. A trial balance is a working list of every account's balance, used to check that debits equal credits. Annual accounts are the formal statements built from it: a balance sheet, a profit and loss account and notes, plus a directors' report unless the company is a micro-entity.

Where must the company keep its accounting records?

At the registered office or another place the directors think fit, open to inspection by the company's officers at all times, under section 388 of the Companies Act 2006. If they are kept outside the UK, accounts and returns showing the position at least every six months must be kept in the UK.

Can a VAT-registered company still keep its books in a spreadsheet?

Yes, if bridging software links the spreadsheet to HMRC so the VAT Return is filed digitally. HMRC's VAT Notice 700/22 says copying and pasting figures between programs is not a digital link, so every transfer from records to return must stay digital.

When is it worth paying a bookkeeper or accountant instead?

When your time costs more than their fee, or the company has complications such as many transactions, several employees, stock, a special VAT scheme, an R&D claim or an HMRC enquiry. A one-off review of your first year's books by an accountant is a middle route.

What if the company's records are lost or destroyed?

GOV.UK says to do your best to recreate them, tell your Corporation Tax office straight away and include this information in the Company Tax Return. Keep statements and receipts backed up in two places, so a lost laptop or a flood does not leave gaps.