Your business records must contain enough information for you to be able to accurately calculate and substantiate the income, expenses and other amounts you report in your income tax return.
We may review your tax return and ask for copies of your records to check the information provided. If we are unable to verify these claims, we may adjust your return. We will contact you before this occurs.
Find out about:
- Record-keeping tips
- Records required for your tax return – income
- Records required for your tax return – deductions
- Stock and asset records
- Personal services income records
The records of the information you use to complete your tax return need to be kept for five years, starting from when you prepared or obtained the records, or completed the transactions or acts those records relate to, whichever is later.
You should keep records long enough to cover the period of review (also known as the amendment period) for an assessment that uses information from the record.
Find out about:
How long to keep cash register tapes
If you use cash register tapes, they can be discarded after one month if you keep Z-totals, which have been reconciled with actual sales and the amount you banked.
If you don't keep the Z-totals and reconciliations, you must keep the full rolls of tape for five years.
If your business structure is a partnership, trust or company, there are some additional specific records that you need to keep to support the information you include in your income tax return. Refer to:
- Company tax return instructions 2020 – record-keeping requirements
- Partnership tax return instructions 2020 – record-keeping requirements
- Trust tax return instructions 2020 – record-keeping requirements
- Sole trader – Individual tax return – record-keeping requirements
- Research and development tax incentive – Keeping records
- Income and deductions for business
If your business is a company and you're eligible to claim the tax offset available under the Research and development (R&D) tax incentive, your business records must be sufficient to verify:
- the amount of the expenditure incurred on R&D activities
- the nature of the R&D activities
- the relationship of the expenditure to the activities
- that you have correctly dealt with any special rules that apply to your claim.
You should keep documents to show how you apportioned expenditure between your eligible core R&D activities and supporting R&D activities as opposed to your other non-R&D activities. Your records should also show how you dealt with special rules about building costs, depreciation and income relating to your R&D claim for past claims.
Your records should be kept from when you carried out your activities. Relying only on records you create later when preparing your return can result in your claim being rejected.
- Research and development tax incentive - Keeping records – detailed record-keeping requirements