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Keeping tax records

Whether you’re a small business, contractor or self-employed, you need to hold on to tax records — for at least seven years — so you can pass them to Inland Revenue if you’re audited.

You must keep all records, whether they're electronic or paper-based, for at least seven years.

You must keep all records, whether they're electronic or paper-based, for at least seven years.

Records you need to keep

Even if you have a bookkeeper or accountant, it's up to you to know what records to hold on to.

The records you may need to keep include:

  • invoices
  • receipts
  • wage books
  • petty cash
  • banking records
  • vehicle logbooks
  • asset registers and depreciation schedules
  • emails, eg arranging business meetings — especially if you're claiming for travel expenses to another city or overseas.

If you’re GST registered you also need to have tax invoices for your expenses so you can claim back the GST. You don’t need a tax invoice for income and expenses under $50. If you’re GST registered, you must keep records that can support an expense claim.

It's good practice to at least record the date, description, cost and supplier for everything you buy for your business.

Keep copies of anything you send to Inland Revenue. Using MyIR makes this easy.

Also, hang on to any calculations you’ve done to fill in your tax return, eg when working out what to claim for your home office.

Keeping records (external link) — Inland Revenue

Staying on top of things

It’s easy to let paperwork go when you’re busy with day-to-day business. But having a good system and staying on top of things can make life much easier when it comes to filing your GST and tax returns.

Packages and apps are great for logging your income and expenses — and they’re tax deductible.

Spreadsheets work just as well, if you don’t have a lot of transactions.

Tool for Business downloads:  Cashbook template (external link) — Inland Revenue

Keep hard-copy records attached to your GST return for that period.

Keep hard-copy records attached to your GST return for that period.

That way if Inland Revenue asks to see them, you'll have all the information at hand.

Where to get help

Inland Revenue has more information about record-keeping and claiming expenses on its website:

Common mistakes
  • Not holding on to all the records you need to keep. If you're audited and don't have the proof of things you've claimed, you can face big penalties or legal action.
  • Not having good systems or staying on top of things — if you don’t your records will be a mess and you could lose important information.
  • Not keeping your records for long enough — you must keep everything for at least seven years.

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