For New Zealand tax purposes, the general Inland Revenue rule is that business records must be kept for seven years.
The tricky part is that the “clock” starts at different points depending on the type of tax:
• Income Tax – for general business records, keep them for seven years after the end of the income year to which the records relate
• GST – keep GST records for at least seven years after the end of the taxable or return period to which they relate
• PAYE – employers must keep PAYE and wage records for seven years. For PAYE records, the period is measured from the payments the records relate to, rather than from the end of the income year
• FBT – if you provide fringe benefits, the relevant FBT records should also be kept. The retention period is generally no more than seven years after the end of the income year to which the records relate
Can Inland Revenue require records to be kept longer than seven years?
Yes. In some situations, such as where there is, has been, or is likely to be, an audit or investigation, Inland Revenue can require records to be kept for up to a further three years. This means records may need to be kept for up to 10 years.
With the start date being variable, we tend to suggest keeping records for eight years just to be on the safer side.
If there is an audit, investigation, dispute, or any uncertainty about whether records may still be needed, keep them for longer.