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Records and bookkeeping
How long should an accountant keep client records? The legal minimums, and a retention schedule to copy
How long a practice keeps due diligence files, tax records and working papers: five years under the AML rules, six for company records, and when to delete.
A practice must keep a client's due diligence records for five years after the client leaves. That is regulation 40 of the Money Laundering Regulations 2017, and the duty is the practice's own. The other figures people quote, 5 years, 6 years and 22 months, are the client's duties to HMRC. A practice needs both sets, because the clocks start on different days.
The periods, and when each clock starts
| Record | Minimum period | Counted from | Whose duty | Source |
|---|---|---|---|---|
| Identity and other due diligence documents | 5 years | The end of the business relationship | The practice | Regulation 40(3) |
| Records of a client's transactions that were subject to due diligence or monitoring | 5 years; the practice need not keep them for more than 10 years | The end of the business relationship | The practice | Regulation 40(3) and (4) |
| Sole trader or partner: business records | At least 5 years | The 31 January filing deadline for that tax year | The client | GOV.UK |
| Individual who is not self-employed: tax records | At least 22 months | The end of the tax year | The client | GOV.UK |
| Limited company: company and accounting records | 6 years | The end of the last financial year they relate to | The company | GOV.UK |
| VAT records | At least 6 years | Not stated on the page | The business | GOV.UK |
| Payroll records | 3 years | The end of the tax year they relate to | The employer | GOV.UK |
GOV.UK lengthens three of these. A self-employed client who files more than 4 years late keeps records for 15 months after filing. A company keeps records for longer than 6 years if they show a transaction that covers more than one accounting period, if it bought something it expects to last more than 6 years, if its Company Tax Return was late, or if HMRC has started a compliance check. VAT records are kept for 10 years by a business that uses the One Stop Shop scheme.
Worked dates for one departing client
A client leaves the practice on 30 October 2026.
- Due diligence file. Five years from 30 October 2026: keep until the end of October 2031.
- Sole trader, 2025 to 2026 return. The filing deadline is 31 January 2027, so the client's records are kept until at least the end of January 2032.
- Company, year ended 31 March 2026. Six years from the year end: 31 March 2032.
- Payroll, 2025 to 2026. Three years from 5 April 2026: 5 April 2029.
Working papers have no set period
We found no single period in law for a practice's own working papers. ICAEW's guidance says some statutory and regulatory rules govern retention, such as those for a client's tax affairs and for regulated business, and recommends that members have a document retention policy. It adds a warning: telling clients about the policy may create a contractual commitment, so the practice should say whether it is a contractual obligation or not.
The other measure is how long a claim against the practice could still be brought. The Limitation Act 1980 gives these limits:
| Claim | Time limit | Section |
|---|---|---|
| Breach of contract | 6 years from the date the cause of action accrued | 5 |
| Tort, including negligence | 6 years from the same date | 2 |
| Negligence where the damage was not known at the time | 3 years from the date of knowledge, if that ends later | 14A |
| Long stop for negligence claims | 15 years from the negligent act or omission | 14B |
Six years covers the ordinary limit for a contract claim. It does not cover the 15-year long stop. Which risk to carry is for the practice and its insurer to decide. This page does not recommend a number.
Whose documents are they
ICAEW's guidance says documents and records the client gave to the practice remain the client's property. Documents the practice created may belong to either side, depending on the work and the engagement letter, and ICAEW recommends that the letter deals with ownership.
This matters when a client leaves. Our disengagement letter template has a paragraph for returning records, and the professional clearance guide covers what the next accountant can ask for.
Deleting is a duty too
Regulation 40(5) says that once the five years have passed the practice must delete personal data obtained for the regulations, unless one of three things applies: another enactment or court proceedings require it to be kept, the person has consented, or the practice has reasonable grounds to believe it is needed for legal proceedings.
The Information Commissioner's Office says the same of all personal data: an organisation must not keep it for longer than it needs it, and needs a policy setting standard retention periods wherever possible. Keeping every passport copy for ever fails that test.
A retention schedule to copy
| What | Keep until | Then |
|---|---|---|
| Identity documents, risk assessment and other due diligence records | 5 years after we stop acting | Delete, unless a legal hold applies |
| Client's own books and source documents | Return to the client when work on them is finished | Keep no copy beyond the working papers |
| Working papers, accounts and tax return files | [ ] years after the period they relate to | Delete or shred, and log the date |
| Copies of returns submitted to HMRC online | Taken before the client is removed from our agent accounts | Kept with the working papers |
| Files under a complaint, claim or HMRC enquiry | Until the matter is closed | Restart the period |
The last-but-one row is there because GOV.UK warns that an agent who removes a client loses access to that client's data in HMRC's online services.
A paragraph for the engagement letter
We keep the documents we use to check your identity for five years after we stop acting for you, as the law requires, and then delete them. We keep our working papers for [ ] years after the period they relate to. Your own books and records remain yours. We return them when our work on them is finished, and you are responsible for keeping them for as long as HMRC requires. This paragraph describes our policy and [is / is not] a contractual commitment.
Add the schedule to the practice file alongside the items in our AML checklist, where the five-year rule is item 5.
This is general information, not legal advice. Limitation periods in Scotland and Northern Ireland are set by different legislation, which we did not read for this page.
Short answers from this page
How long does an accountant have to keep a client's identity documents after the client leaves?
Five years from the end of the business relationship, under regulation 40 of the Money Laundering Regulations 2017. For a client who leaves on 30 October 2026 that runs to the end of October 2031. After that the personal data must be deleted, unless another law or legal proceedings require it or the person has consented.
Source: Money Laundering Regulations 2017, regulation 40
How long does a self-employed client have to keep their business records?
At least 5 years after the 31 January filing deadline for the tax year, on GOV.UK's guidance. For a 2025 to 2026 return the deadline is 31 January 2027, so the records are kept until at least the end of January 2032. Company and VAT records are kept for 6 years and payroll records for 3.
Source: GOV.UK "Business records if you're self-employed", "Running a limited company" and "PAYE and payroll for employers"
Where this comes from: Money Laundering Regulations 2017, regulation 40, and Limitation Act 1980, sections 2, 5, 14A and 14B (legislation.gov.uk); GOV.UK "Business records if you're self-employed", "Keeping your pay and tax records", "Running a limited company: your responsibilities", "Charge, reclaim and record VAT" and "PAYE and payroll for employers"; ICAEW "Documents and records: ownership, lien and rights of access" (first published 2006, references updated March 2014); ICO "Principle (e): Storage limitation"; all read 2026-10-01.
AEO Lookup editorial team
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