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