ATO Record Keeping Rules

By Tanya McNamara
Find me on:
file-folders-923523_1280.jpg

The Australian tax system relies on taxpayers self-assessing. This means that you are responsible for working out how much you can declare and claim on your tax return. You also need to be able to show how you arrived at these figures – in some cases you may be required to provide written evidence.


 

Why should I keep my business and financial records?

The Australian tax system relies on taxpayers self-assessing. This means that you are responsible for working out how much you can declare and claim on your tax return. You also need to be able to show how you arrived at these figures – in some cases you may be required to provide written evidence.

There are many benefits to be had by keeping your business affairs in order. Good business records equal making the best use of your tax advisor. This will enable us to complete your income tax return, reduce the risk of tax audits and adjustments, and avoid exposing yourself to penalties from the Australian Taxation Office.

What records should I keep?

Individual taxpayers should keep records of:

  • Any income you have received
  • Any expenses related to income received
  • Acquisition and disposal details of assets such as shares and rental properties
  • Tax deductible gifts and donations
  • Medical expenses incurred

Business taxpayers should keep records of:

  • Sales records (sales invoices, sales voucher and receipts, cash register tapes, bank deposit books)
  • Purchase records (purchase invoices, purchase receipts, cheque butts, credit card statements)
  • Year end tax records
  • Motor vehicle expenses
  • Debtors and creditors lists
  • Stocktake sheets
  • Capital gains tax records
  • Employee records (TFN declarations, PAYG payment summaries, super records, fringe benefits provided)

If you are unsure whether or not to keep a record, you should keep it and provide it to us at tax time. This will assist us in maximising your deductions.

How long should I keep my records for?

As an individual taxpayer you must keep records for five years from the date your income tax return is lodged. Businesses must keep records for five years after they are prepared, obtained, or the transactions completed, whichever occurs latest. For assets subject to capital gains, records must be kept for 5 years after the asset is sold or disposed of.

Interaction with Xero

For our clients who have a Xero ledger, please note that you are now able to attach files to transactions including sales invoices, bills, expense receipts, and fixed assets. Files can be attached to any transactions or items that display the file logo. Click on this link to learn how to Upload Files.



If you have any questions about your record keeping requirements, do not hesitate to contact your accountant directly. You can also refer to the ATO website for more information.



 

Topics: Insider

Subscribe to Email Updates

Recent Posts