To run a business successfully, you need to maintain various records. There are some records that you need to maintain for more than five years. In today’s blog, we’ll discuss what types of records are required to be kept for longer than five years.
What Types of Records do You Need to Maintain for Over Five Years?
Take a look at the following records that your business needs to keep:
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Records related to a tax return or document that is changed or corrected
You are required to keep records for a long time to cover the review period or amendment period for an assessment that utilises information from the record. The review period is the time period within which amendments can be made by you or by the ATO.
For example, the review period for:
- From the day the ATO gives you the notice of assessment, an income tax return is typically due within two years for individuals and small businesses and within four years for all other taxpayers.
- A business activity statement (BAS) is typically valid for four years from the day the assessment notification is provided.
- A fringe benefits tax return is usually for 3 years from your date of lodgment.
The five-year retention period and the review period for the relevant evaluation must both be covered by you for long enough. The five-year retention period will frequently include the review period as well.
The review period for an updated assessment begins the day after the ATO gives you the notice of the revised assessment when your assessment is changed.
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Records of information that will be used in the future again
You must keep a record until the end of the period of review for a subsequent tax return if information from the record is used in one financial year’s tax return and then used again in a future return.
Example include:
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- If your borrowing costs must be spread out over five years, you must maintain the required records for long enough to complete the period of review for the tax return from the previous year in which you claimed those costs.
- You must keep the records you used to calculate the loss until at least the end of the review period for the 2018-19 tax return if you determine that you made a business loss in 2012–13 and carry it forward and deduct it in your business’s 2018–19 tax return.
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Records of depreciating assets
As long as you have assets, you need to keep the records for those assets, and then you need to keep those records for at least five years after you sell the asset. However, there are different time periods and needs that apply if the depreciating asset falls under the low-value pool or is subject to rollover relief.
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Records of capital gains tax assets
For capital gains tax assets, you are required to maintain the records for as long as you have the asset, and then at least for five years after selling the asset.
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Petroleum resource rent tax records
You need to keep petroleum resource rent tax (PRRT) records for seven years or more.
Conclusion
The blog shares information on different types of records that every business needs to keep for more than five years. Moreover, you can get more information about important documents you need to keep for long enough by contacting Reliable Melbourne Accountants.
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