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LEGAL REQUIREMENT The most important reason for keeping good records is that it’s a legal requirement. By law, we require you to keep business records: ■ for five years after they are prepared, obtained or the transactions completed (whichever occurs later), and ■ in English, or in a form that we can access and understand in order to determine your tax liability.
You should keep records for a longer period if you use information from those records in a later tax return (for example, claiming a loss carried forward from a business activity in an earlier year). The records should be kept until the end of any period of review for that later return. Records relating to assets for capital gains tax purposes may also need to be kept for a longer period. You can issue and store records in either paper or electronic form. There are penalties for not maintaining the required records and for not keeping them for five years. Keeping good records will help you avoid these penalties. Other regulatory bodies may have different record keeping requirements from ours, particularly around how long you have to keep records. |
