What records do I need to keep for tax purposes and for how long?

Under the Tax Administration Act 1994, taxpayers must keep sufficient records to enable Inland Revenue to readily ascertain their tax liability, and generally records must be kept for seven years from the end of the relevant tax year, including invoices, bank statements, receipts, GST records and records supporting any deductions claimed. If you use accounting software, records must remain accessible in a usable form. For GST-registered businesses, tax invoices and related records are especially important, and specific record requirements also apply for PAYE and employer obligations if you have staff. Poor record keeping can make it harder to defend your position if Inland Revenue queries a return, and can affect your ability to claim deductions. Consider digital record keeping and regular backups, and consult an accountant to set up systems appropriate to your business.