Digital Records: What HMRC Actually Needs to See

Under Making Tax Digital (MTD), keeping digital records means more than simply taking photos of your receipts. Your records should contain enough information to clearly show your business income and expenses, including the date, amount, category and nature of each transaction. You should also keep details of your sales, purchases and other relevant financial transactions.

Photos or scans of receipts can still be useful as supporting evidence, but they do not replace the actual digital record. The information from the receipt needs to be entered or captured in compatible accounting software so that your income and expenses can be used for your MTD updates.

Keeping records up to date throughout the year makes it easier to track your taxable profit, identify missing information and provide evidence if HMRC asks questions. Good digital records also reduce the risk of errors when submitting your quarterly updates.