Record-Keeping Requirements For Tax Planning


As we approach the end of the financial year, the duties and responsibilities that we need to manage begin to crop up. To help manage a lot of the tax planning and business strategising that takes place during this time, up-to-date records of the previous year can be of invaluable help.

If done well, record-keeping can help make the running of a business a lot easier. It provides an overview of the business’s financial progress so that owners can assess their strengths and weaknesses, and make decisions accordingly.

Record keeping also enables owners to meet their tax and superannuation obligations easily – all the data and information required is readily available. Finally, record-keeping provides owners with a profile, of sorts, which demonstrates the financial position of the business to banks or other lenders.

Record-keeping requirements related to tax and superannuation need to be met. The specifics will depend on the unique tax and superannuation and obligations your business may have and the structure of your business (sole trader, partnership, company or trust).

The Australian Taxation Office (ATO), requires the following from all businesses:

  • The records cannot be changed and further, information should be kept so that it cannot be changed or damaged.
  • The records must be kept for 5 years from the date they were prepared, obtained or a transaction was completed – or the latest act they relate to. The records might need to be kept for longer periods in certain circumstances.
  • The business must be able to show the ATO their records if requested.
  • The records must be in English or easily translated into English.

The ATO will accept paper and electronic records.

  • There has been an inclination towards electronic record-keeping for both tax and super requirements as this makes certain tasks easier and reduces workload after initial set-up. There may be some laws that require paper records in addition to electronic ones.
  • Businesses may also keep paper records electronically i.e. scan paper documents and store them on an electronic medium (and dispose of papers).
  • If records are stored electronically, then they should be on a device that owners have all access to, have been backed up, and allows the owner to have control over the information that is processed, entered or sent from the device.

If you don’t keep the tax records for the required length of time (5 years) you could be subject to harsh penalties. One of the easiest ways to manage your records for your tax is to provide them to your accountant as soon as possible, or store them in a single location (digitally or physically) and provide them to your accountant when it comes time to do taxes.


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