Starting a business is exciting. You're doing what you love and what you're good at.
It's important you keep accurate and complete records. Your business records should include:
- banking information
- proof of income
- cash books, and
- wage books.
You need to be organised, keep your records up-to-date and then hold on to them for seven tax years.
Good records are important for your business because they:
- make filling in your tax returns easier and quicker
- make it quicker for your tax agent or accountant to do your books and will save you money
- give you the information you need to manage your business and help it grow, and
- make it easier to get a loan.
Tax records are a legal requirement of running a business.
Record keeping video
Learn about keeping records when you're in business for yourself.
Flash video | 3:25 mins
What tax records are
A tax record includes any information or document about:
- assets, and
You can use your records to fill in tax returns and finalise your tax.
Records can be paper-based or you can use a bookkeeping software package. We'll accept paper records, electronic records or a combination of both.
|Examples of paper records||Examples of electronic records|
|Cashbook, journals, ledgers||Accounting software|
|Chequebooks / deposit books||Online bank statements|
|Lists of debtors and creditors||Online interest and dividend statements|
|Bank statements / dividend statements||Invoices received by email|
|Lists of assets and liabilities||Lists of assets and liabilities|
|Depreciation schedules||Profit and loss statements|
|Profit and loss statements||Balance sheets|
|Balance sheets||Eftpos transactions|
How long records are kept for
Records must be kept for seven tax years.
It's a good idea to keep your paper records off the ground and in a dry place so they stay in good condition.
Electronic records should be backed up, eg on a USB stick, and kept in a secure place. If you change to new software check that you can still read your old records using the new system.
Getting it right
Keep all your records throughout the year. Everything is important.
Keep records of cash and non-cash sales and expenses.
Keep all your records, including those in electronic form, for seven tax years.
Your records must be in English unless you get approval from us to use another language.
If you store your records offshore, including cloud computing, make sure either you or your cloud service provider has our approval.
What we are doing
- Our staff are working with the community to help them understand their obligations.
- Taking action when a customer fails to comply with record keeping standards. This is to encourage accurate reporting of business transactions and to ensure accurate tax positions are established.
- Providing record keeping information through myIR Secure Online Services.
Storing records in electronic form
You are able to store your business records electronically, so long as in doing so you meet the requirements of the Electronic Transactions Act 2002.
The Act requires that the:
- integrity of the information will be maintained, and
- information will be readily accessible so as to be useable for subsequent reference.
We may allow a:
- taxpayer to store records offshore, or
- third party to hold records offshore for multiple taxpayers.
When we consider requests to store records offshore, we'll ensure that this won't hinder our compliance activities. This means the records stored offshore must be able to be referred to New Zealand without delay and at no cost to us.
Read our Standard Practice Statement 13/01 for guidelines on the retention of business records in electronic format and how we consider an application to store business records offshore
If you need more help
If you need help with your record keeping have a look at our Tool for business.
You can also make an appointment for free advice from one of our Community compliance officers or a Kaitakawaenga Māori.
Date published: 23 Oct 2014