Have you ever wondered how long you should be keeping your business records? Before you throw away those big boxes of documents, you should consider the requirements of the various regulatory bodies.
The Australian Taxation Office (ATO) requires that records are kept for five years from the date the record is prepared, obtained or the transaction is completed, whichever occurs last. This includes all records related to establishing, running and selling your business, including one-off transactions. Records can be electronic or paper copies, and need to be in English.
Records will need to be kept for longer if that information is used in a later tax return. For example, you need to keep all records related to a carry-forward capital loss, until the review period of the tax return that the loss is used, has ended.
The Australian Securities and Investment Commission (ASIC) requires companies to keep records for seven years. By law a company must keep financial records that:
- correctly record and explain its transactions and financial position and performance, and
- enable true and fair financial statements to be prepared and audited.
Records may be kept electronically, but must be convertible into hard copy.
STATE TAX AUTHORITIES
The various state tax authorities that administer state taxes, such as payroll tax and land tax, require records to be kept for no less than five years. The records must be in English, readily available, and be sufficient to enable the relevant tax liability to be properly assessed.
For the Queenslanders, it is important to note that the Queensland Office of State Revenue requires that original documents are stored even if electronic records are kept. No other state tax authority makes mention of this requirement.
FAIR WORK OMBUDSMAN
The Fair Work Ombudsman requires employers to keep time and wages records for seven years. These records need to be readily accessible, legible and in English.
A good record keeping system is important and will help you to comply with the above requirements and avoid penalties. Electronic record keeping is widely accepted and if this is your preferred method, it is important to store your data securely and ensure you regularly back-up your data.
There are conflicting lengths of time for each statutory body so it is important to remember the above requirements before you dispose of your records. As always, if you are in any doubt do not hesitate to contact your client manager.
Kreston Stanley Williamson Team
*Correct as of December 2018
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.