After Your MTD Quarterly Update: What Records You Must Keep and Store

You've Filed Your Quarterly Update - Now What?

Submitting your MTD quarterly update feels like the finish line. But it is not. The moment you hit send, a new responsibility begins: keeping the right records in the right place for the right amount of time. HMRC can ask to see the evidence behind any figure you have reported - not just now, but for up to six years after the fact. If you cannot produce it, you have a problem.

This guide covers exactly what you need to keep after filing, how long to keep it, where to store it safely, and what you can actually delete without worry. It is written for sole traders and landlords who are managing this themselves, without an accountant holding their hand.

Why MTD Record Retention Matters More Than You Might Think

MTD quarterly updates are not your final tax liability. They are estimates submitted to HMRC throughout the year, based on the income and expenses you have recorded so far. Your final declaration (which replaces the old tax return) is where everything gets confirmed. And even after that, HMRC can open an enquiry into any tax year.

That means every invoice, receipt, bank statement, and mileage log that underpins your quarterly figures needs to be kept - not just until you file, but for years afterwards. This is what is meant by MTD record retention: keeping the paper trail that supports what you reported.

If HMRC opens an enquiry and you cannot produce records, they can estimate your liability and charge penalties on top. The burden of proof is on you, not them.

The Six-Year Rule: How Long HMRC Expects You to Keep Records

Under HMRC rules, sole traders and landlords must keep business records for at least five years after the 31 January filing deadline for the relevant tax year. In practice, this works out to roughly six years from the end of the tax year itself - which is why you will often see "six years" quoted as the standard retention period.

Here is what that looks like in practice:

• For the 2026-27 tax year (April 2026 to April 2027), the filing deadline is 31 January 2028.
• You must keep records until at least 31 January 2033 - five years after that deadline.
• If HMRC suspects deliberate inaccuracy or fraud, they can go back up to 20 years. This is unusual, but it is worth knowing.

The six-year rule applies to all supporting records, not just the figures you entered into your software. If you submitted a quarterly update showing £1,200 in office expenses, you need to be able to show exactly what made up that £1,200.

What Records You Must Keep After Filing

Sales Invoices and Proof of Income

Every payment you received during the quarter needs to be traceable. This means keeping:

• Copies of all sales invoices you issued to clients or customers
• Records of cash payments received (a simple dated log is fine if no invoice was raised)
• Platform payment summaries if you work through apps or marketplaces
• Rental income records including tenancy agreements, rent schedules, and payment confirmations

If your income is reported to HMRC by a third party (for example, a letting agent sends a statement or a client sends you a remittance advice), keep those documents too. They corroborate your figures.

Expense Receipts and Purchase Records

Every expense you claimed needs a receipt or equivalent proof. That includes:

• Physical receipts (scan or photograph these - paper fades)
• PDF receipts from email or supplier portals
• Credit card or bank statements showing the transaction (useful as backup, but a statement alone is often not enough - HMRC prefers an itemised receipt)
• Invoices from contractors, tradespeople, or suppliers
• Subscription confirmations for software, professional memberships, or services you have claimed

If you claimed mixed-use expenses - where only a percentage was business-related - keep a record of how you calculated that split. A short note explaining your method is enough. The post Mixed-Use Expenses and MTD: Claiming the Business Percentage explains how this works in more detail.

Bank Statements

Your bank statements act as a spine for your records. They show the full picture of money in and money out, which HMRC can cross-reference against your reported figures.

• Keep statements for every account used for business, including personal accounts if you run expenses through them
• Download PDF statements quarterly and store them alongside your other records - do not rely on your bank keeping them accessible for six years
• If you use a business and personal account, keep both sets

Mileage Logs

If you claimed mileage using the simplified flat rates, your log is your proof. HMRC expects it to show:

• The date of each journey
• The start and end point (or a description of the route)
• The business purpose of the journey
• The number of miles travelled

A spreadsheet, notebook, or app export all work. What does not work is a rough estimate reconstructed later from memory. Keep the log current and archive it at the end of each quarter. The post Mileage Allowances for MTD: Claiming Simplified Rates in Q1 covers what you can claim.

Payroll and Subcontractor Records

If you paid employees or subcontractors during the quarter, keep:

• Payslips or payroll reports
• CIS (Construction Industry Scheme) statements if applicable
• Invoices from self-employed subcontractors
• Evidence of any PAYE payments made to HMRC

Allowances and Adjustments

If you claimed the trading allowance, a capital allowance, or any other adjustment, keep a note of what you claimed and why. For capital items (equipment, vehicles, tools), keep the original purchase receipt and any record showing when and how the item was used for business. See Q1 Allowances and Adjustments: What to Claim in August 2026 for guidance on what qualifies.

What You Can Safely Delete or Discard

Not everything needs to be kept forever. Here is what you do not need to hold onto:

• Duplicate copies of the same document. If you have a scanned PDF receipt and the original paper receipt, you only need one. HMRC accepts digital copies.
• Receipts for non-business purchases. If you bought something purely personal and did not claim it, there is no obligation to keep the receipt.
• Draft versions of invoices or documents. Once the final version is saved, drafts serve no purpose.
• Rough notes or interim calculations from your bookkeeping process - once reconciled and filed, these working papers are not required by HMRC.

What you should never delete: anything that relates to a figure you actually reported in a quarterly update or final declaration.

Where to Store Your Records Safely

Digital Storage Options

HMRC accepts digital records, and most people will store documents digitally. Good options include:

• Cloud storage such as Google Drive, Dropbox, or OneDrive. These back up automatically and can be accessed from anywhere.
• Your MTD software's built-in storage, if it offers document attachment features.
• A dedicated folder structure on your computer, backed up to an external drive or cloud service.

Whatever you use, organise your files by tax year and quarter. A structure like 2026-27 > Q1 (April-July) > Expenses makes it easy to find documents quickly if HMRC asks.

Paper Records

Paper receipts fade. If you receive paper receipts, photograph or scan them and save the digital copy. You do not need to keep the paper version once you have a legible digital copy, but make sure the digital version is readable - a blurry photo of a crumpled receipt will not satisfy HMRC.

Security and Access

Your records contain personal financial information. Keep them secure:

• Use a password on cloud storage accounts and enable two-factor authentication
• Do not share access with people who do not need it
• If you use a shared computer, store tax records in a separate, password-protected folder

How to Organise Records After Each Quarterly Update

The best time to sort your records is immediately after you file, not six years later. Here is a simple process to follow after each quarterly update:

1. Export a copy of your submitted quarterly update from your MTD software and save it alongside your records for that quarter.
2. Check that every figure in the update has a corresponding document. Go line by line through your income and expense categories.
3. Label and file any loose documents that have not yet been organised. Receipts sitting in an email inbox or a phone camera roll are at risk of being lost.
4. Download bank statements for the quarter and save them to your records folder.
5. Archive the mileage log for the quarter and start a fresh one for the next period.
6. Note any records that are missing and try to obtain duplicates before you forget the context.

This takes less than an hour per quarter if your records are reasonably organised to begin with. If you are struggling with that, the post Setting Up Your MTD Bookkeeping System: A Practical 75-Day Guide is a useful starting point.

What Happens If You Cannot Produce Records

If HMRC opens an enquiry and you cannot produce records to support your figures, they have the power to:

• Disallow the expenses you claimed
• Raise an assessment for tax they believe is owed
• Charge interest on underpaid tax
• Issue penalties, depending on whether the failure is seen as careless or deliberate

The penalty position for record-keeping failures sits separately from the MTD points-based penalty system for late filing. You can read about the late filing side in MTD Penalties Explained: What Happens If You File Late or Miss a Deadline?.

The most straightforward way to avoid all of this is to keep records as you go, archive them properly after each quarter, and never delete anything connected to a figure you reported.

A Quick Reference: MTD Record Retention at a Glance

• Sales invoices and income records: Keep for six years from the end of the relevant tax year
• Expense receipts and purchase records: Keep for six years
• Bank statements: Keep for six years - download PDFs, do not rely on online banking access
• Mileage logs: Keep for six years
• Payroll and subcontractor records: Keep for six years (three years for PAYE in some cases, but six is safer)
• Tenancy agreements (landlords): Keep for the duration of the tenancy plus six years
• Capital items (equipment, vehicles): Keep purchase records until you dispose of the item, plus six years

For more detail on what HMRC expects you to hold, the post HMRC Record-Keeping Standards for MTD: What You Must Keep goes deeper on the underlying rules.

The Short Version

Filing your quarterly update is not the end of your record-keeping responsibility - it is the start of a six-year retention period. Keep every invoice, receipt, bank statement, mileage log, and expense record that relates to figures you reported. Store them digitally in an organised folder structure, back them up to the cloud, and archive everything cleanly after each quarter. Do not delete records just because you have filed. HMRC can ask to see the evidence behind any figure at any point during that six-year window, and if you cannot produce it, the consequences are yours to deal with - not theirs.