The end of the financial year is nigh, and you’re gathering together documents to prepare for 2013/2014 tax filing. But how long will you have to hang onto them?
Filing cabinet picture from Shutterstock
You’ll hear lots of different figures quoted, but as the Australian Taxation Office makes clear, five years is the minimum period:
By law, you must keep business records for five years after they are prepared, obtained or the transactions completed, whichever occurs latest.
The “transactions completed” clause is important; if you’re relying on those records in other contexts, then the length you need them will be extended. Any records you use for tax purposes would need to be kept for at least five years after your notice of assessment is issued, and potentially for longer if you are claiming losses over a number of years.
In most circumstances, keeping business records for the life of the business and beyond makes sense — and if you keep them in electronic form, they won’t take up valuable real estate. (Electronic records have the same legal validity as paper ones.)
Reminder: For specific tax advice relating to your individual situation, consult a registered professional.