For UK self-assessment, you must keep records of all business-related insurance premiums, including professional indemnity, public liability, employer’s liability, and business asset cover. HMRC requires you to retain these records for at least five years after the 31 January submission deadline. These premiums are typically tax-deductible business expenses, so accurate records reduce your taxable profit and protect you during an HMRC inquiry.

Which Insurance Records to Keep

Business Insurance Premiums (Tax Deductible):

If you are self-employed or run a business, keep records of professional indemnity insurance (essential for many trades and consultants), public liability insurance (covers injury or damage claims), employer’s liability insurance (legally required if you have employees), business contents and equipment insurance, and commercial vehicle insurance when the vehicle is used for business purposes.

Personal Insurance for the Self-Employed:

Income protection insurance premiums may qualify as a business expense in certain circumstances. Private medical insurance is generally not deductible unless it forms part of an employment package, so verify your eligibility with an accountant before claiming.

What to Save:

Retain the full policy documents and schedules showing cover details, premium payment receipts or bank statements proving the payment date and amount, renewal notices that document dates and premium changes, and any claims correspondence, as this affects future premiums and demonstrates ongoing cover.

Read also: Business Insurance for Small Businesses and Sole Traders in the UK

How Long to Keep Them

According to HMRC, you must keep records for five years after the 31 January submission deadline for that tax year. For the 2025/26 tax year (submitted by 31 January 2027), keep records until at least 31 January 2032. As covered in foundational finance texts such as Principles of Finance, proper record retention protects your financial position and ensures compliance with regulatory requirements.

Why It Matters

The Association of British Insurers notes that proper documentation ensures you can prove expenses claimed on your tax return. Insurance premiums for business use are allowable expenses that reduce your taxable profit. During an HMRC inquiry, missing records can result in rejected deductions, additional tax bills, and penalties. MoneyHelper advises keeping digital and physical copies of all financial records to avoid loss.

Common Mistakes

Mixing personal and business insurance is a frequent error. Only the business-use portion of premiums is deductible, so if you use a vehicle or property for both personal and business purposes, you must apportion the insurance cost accordingly. Discarding records too early leaves you vulnerable if HMRC opens an inquiry within the five-year window. Failing to keep proof of payment, such as bank statements or receipts, means HMRC may reject your claim even if you have the policy documents.

Next Steps

Set up a dedicated folder (digital or physical) for each tax year and file insurance documents immediately upon receipt. Review your records each January before completing your self-assessment return to ensure all deductible premiums are claimed. If you are unsure which insurance premiums qualify as business expenses for your specific situation, or how to allocate mixed-use cover, consult an HMRC-registered accountant or tax adviser for guidance tailored to your circumstances.

Disclaimer: This article provides general information only and does not constitute regulated financial, tax, or legal advice. We are not authorised by the Financial Conduct Authority. Insurance cover, tax treatment, and HMRC requirements vary depending on individual circumstances. Before making decisions about your tax return or insurance records, consult an HMRC-registered accountant or tax adviser, and verify current HMRC guidance at gov.uk. Whilst we aim for accuracy, tax rules and insurance regulations change, so always confirm details with HMRC or a qualified professional for your personal situation.