What Is Your Legal Requirement When It Comes To Keeping Paperwork?

Apr 23, 2016
2 min read

When you are a Small Business Owner there is one thing that you have in common with other Small Business Owners no matter what Industry they are in and that is, what to do with all the paperwork that you accumulate. It seems to build up faster than you expected and it keeps getting in your way and you can never find that one piece of paper that you are looking for until it's too late and you don’t need it anymore.

Your Legal Requirements

So, what do you need to keep and for how long? By law, the ATO requires you to keep business records for 5 years after they are prepared, obtained or the transactions completed, whichever occurs latest. In either English or a form that they can access and understand in order to work out the amount of tax you are liable to pay. Records can be issued and stored in either paper or electronic form. It doesn’t matter what way you keep them; they still need to be kept for 5 years.

There are penalties if you do not maintain the required records and/or do not keep them for five years. But you can avoid these penalties by simply keeping good records.

Storing paper records electronically.

It doesn’t matter if you have a manual bookkeeping system or an electronic one, you can elect to scan and store your paper records electronically.

What must you keep? Following is a list of what you much keep at a minimum:

Sales Records

Sales invoices, including tax invoices
Sales vouchers or receipts
Cash register tapes
Credit card statements
Bank deposit books and account statements

Purchase/expense records

Purchase/expense invoices, including tax invoices
Purchase/expense receipts, which include an ABN
Cheque Butts and bank account statements
Credit Card Statements
Records showing how you worked out any private use of something you purchased

Year-end income tax records

Motor vehicle expenses
Debtors and creditors lists
Stock take sheets
Depreciation schedules
Capital Gains Tax records

Payments to employees

Tax File Number declarations and withholding declarations
Withholding variation notices
Worker payment records
PAYG payment summaries
Annual reports
Super Records
Records of any fringe benefits provided

PAYG withholding for business payments

Records of amounts withheld from payments where no ABN was quoted
A copy of any PAYG withholding voluntary agreements
Records of voluntary agreement payments
All PAYG payment summaries, including PAYG payment summary – employment termination payments
PAYG payment summary – employment termination payments
Annual reports

Fuel Tax Credits