Have you consulted a tax advisor to determine how long you should keep your business records? It’s essential to consider the requirements of different regulatory bodies before discarding those giant boxes of documents.
ATO
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 of establishing, running and selling your business, including one-off transactions. Records can be electronic or paper copies and need to be in English.
Records must be kept 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.
ASIC
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 accurate 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 and land taxes, require records to be kept for under five years. The records must be in English, readily available, and sufficient to assess the relevant tax liability appropriately.
For the Queenslanders, it is essential 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 wage records for seven years. These records need to be readily accessible, legible and in English.
A sound record-keeping system is essential 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 essential 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 essential to remember the above requirements before you dispose of your records. Do not hesitate to contact your client manager with any questions.
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 in this article, you must seek specific advice relating to your particular circumstances. Liability is limited by a scheme approved under professional standards legislation.
