Proper record keeping

Are you?
– A taxpayer?

At a glance:
– The Tax Office has provided a factsheet on record keeping requirements and related penalties.

You should:
– Ensure you keep your financial records for as long as it is legally required.
– Contact us if you require any clarification or advice.

The Tax Office has released a guideline that explains in detail the importance of record keeping for small businesses and non-profit organisations.

Generally, taxpayers carrying on a business are required to keep records for a period of five years after the income year in which they lodge their tax return.

Records that are required to be retained include documents that:

• Specify and explain all transactions;
• Relate to all tax liabilities; and
• Relate to any election, choice, determination or calculation made under a tax law.

The Tax Office provides a ‘Record keeping evaluation tool’ that helps taxpayers keep adequate documentation.

It also assists businesses by providing the following:

• A list of records tailored for the business;
• A report on the performance of record keeping; and
• Suggested improvement.

Taxpayers are therefore encouraged to keep all their tax records in a safe place or face the possibility of administrative penalties should they be unable to substantiate their claims.

Remember:
– Ensure you keep adequate records to explain your taxation transactions.