How long do you have to keep records for your business in New Zealand?

There are a lot of legal responsibilities that come with running a business in New Zealand, not just making sales and hiring people. One of the most important but often forgotten responsibilities is keeping accurate records. It’s not just good business sense to know what papers to keep and for how long; it’s also the law. If you don’t follow the rules, you could face serious consequences and problems later on.

A lot of business owners wonder, “How long do I really need to keep all this paperwork?” The answer isn’t always clear-cut because different kinds of records have different amounts of time they need to be kept. Every document, from tax invoices and payroll information to financial statements and company registers, helps show that you are following the rules and are in good financial shape.

This guide will show you everything you need to know about keeping business records in New Zealand. We’ll talk about the specific legal duties you have, the types of records you need to keep, and the minimum timeframes set by law. You’ll also learn what happens if you don’t follow the rules, the best ways to keep your documents organized, and how to safely get rid of them when the time is right.

What You Need to Know About Keeping Records in New Zealand

There are a few important laws in New Zealand that say businesses must keep records. The Companies Act 1993 and the Tax Administration Act 1994 are the two most important laws for almost every business. The first step to making a record-keeping system that follows the law is to learn about these laws.

The 1994 Tax Administration Act

This is the main law that tells you what you need to do for the Inland Revenue (IRD). The IRD says you need to keep detailed records so you can figure out exactly how much tax you owe, such as GST, income tax, and PAYE.

The IRD says that your records must be in English or te reo Māori.

• Be in English or te reo Māori.
• Clearly show all of your gross income.
• Help you fill out a full and correct tax return.
• Have proof in the form of invoices, bank statements, and receipts.

The IRD can do audits and look back several years. The best way to protect yourself during an audit is to keep very detailed records. The general rule is that you have to keep records for at least seven years after the tax year ends.

The 1993 Companies Act

The Companies Act 1993 says that registered companies must keep extra records. This act is more focused on corporate governance and transparency, ensuring that shareholders and directors have access to accurate information about the company’s operations and financial position. 

This law says that a business must keep records like:

• The rules of the company.
• Minutes of all meetings and decisions made by shareholders and directors.
• A list of directors’ interests.
• A list of shares.
• Accounting records that accurately record and explain what the company does.

The Registrar of Companies must be told where the company’s registered office or another place in New Zealand is where these records must be kept.

What Business Records Do You Need to Keep? 

It’s one thing to know you need to keep records; it’s another to know exactly what to keep. Let’s look at the main types of business records you should keep.

Records of Money

These are the most important parts of your business’s compliance. They are necessary for making tax returns and financial statements.

• Bank Statements: All the statements for business credit cards and bank accounts.
• Invoices: These are both sales invoices sent to customers and purchase invoices sent to suppliers.
• Receipts: For every business expense, no matter how much it is. The IRD has rules for receipts under $50, but it’s best to keep all of them.
• General Ledger and Journals: The main accounting books that keep track of all money coming in and going out.
• Asset Register: A list of all the business’s assets, along with their purchase date, value, and depreciation.
• Stocktakes and Inventory Records: Information about the stock on hand at the end of each fiscal year.

Tax Records

These have to do with what you owe the IRD.

• GST Returns: Copies of all GST returns that were filed and the calculations that were used to make them.
• FBT Returns: Records of any extra benefits given to employees.
• PAYE Records: Details of employee wages, salaries, and tax deductions. 
• Income Tax Returns: Copies of all the business’s annual income tax returns.

Records of Employment

If you have employees, the Employment Relations Act 2000 requires you to keep detailed records for each staff member. 

• Contracts of Employment: A signed copy of each employee’s Individual Employment Agreement (IEA).
• Wage, Time, and Holiday Records: Detailed records of hours worked, pay rates, and leave taken and owed.
• PAYE and KiwiSaver Details: Information about tax breaks and KiwiSaver payments.

Records of the Company and Its Governance

The Companies Act says that registered companies must have these papers.

• Company Constitution: The rules that the company must follow.
• Share Register: A list of all the shareholders and what they own.
• Resolutions from directors and shareholders: Minutes from all official meetings.
• Annual Reports: All annual reports are sent to shareholders..

How long do you have to keep business records in New Zealand?

Retention periods are the most common question that business owners have. Seven years is a good rule of thumb, but it can change depending on the type of record.

Type of Record	Minimum Length of Time Required by Law	Governing Legislation
Records for accounting and taxes (invoices, receipts, etc.)	Seven years after the end of the tax year they are about.	The 1994 Tax Administration Act
Employment Records (Wages, holidays, time)	7 years from the date the record was created.	The Holidays Act of 2003 and the Employment Relations Act of 2000
Records of Health and Safety	5 years after the event or monitoring took place.	The Health and Safety at Work Act 2015
Company Records (Share register, constitution)	Must be kept current. Share register must be kept for the life of the company and 10 years after.	Companies Act 1993
Property Purchase Records	7 years from the date of disposal of the property.	Tax Administration Act 1994
Deeds and Legal Agreements	Permanently or for the life of the agreement plus a subsequent period (often 7-10 years).	General best practice / Contract law

How long can the IRD look back?

Typically, the IRD has a four-year time limit to amend an assessment. The IRD can go back further, though, if they think a tax return is fake or meant to mislead them. This is a big reason why the seven-year retention rule is so important: it protects you even after the normal audit period.

The Consequences of Poor Record-Keeping 

Not keeping up with your record-keeping duties can have serious effects on your business. These aren’t just small mistakes in the office; they can lead to big fines and legal problems

• IPenalties from the IRD: If you don’t keep good records, the IRD can fine you a lot of money. These fines can add up to thousands of dollars.
• Tax Returns That Aren’t Correct: If you don’t keep good records, you might file the wrong tax returns, which could lead to audits, reassessments, and more penalties for not paying enough taxes.
• Deductions that were missed: The IRD can deny the deduction if you can’t show proof of a business expense. This will raise your taxable income and tax bill.
• Problems with Disputes: If you have a problem with a customer, supplier, or employee, your records are the most important proof. You are much weaker without them
• Issues with getting money: Before giving you money, banks and investors will want to see accurate financial records. Poor records can make it impossible to secure the capital you need to grow. 

The best ways to keep track of your business records

Keeping records in a systematic way will save you time, lower your stress, and make sure you stay compliant.

1. Start using digital tools right away: No more shoeboxes full of old receipts. You can use accounting software like Xero, MYOB, or Hnry to keep track of and store records electronically. You can take a picture of a receipt, and it will be saved and sorted right away. The best way to keep business records is online.
2. Set up a clear system for organizing: Make a folder structure for your digital files that makes sense. For example, create folders for each financial year, then subfolders for “Invoices,” “Bank Statements,” and “Payroll.” 
3. Make copies of everything: Digital files are easy to use, but they can still be lost. Use cloud storage services like Google Drive, Dropbox, or OneDrive, and make sure to back up your data on a regular basis. This keeps you safe from hardware failures and cyberattacks.
4. Schedule Regular Admin Time: Set aside a certain amount of time each week or month to update your records. Staying on top of it prevents a mountain of paperwork from building up at the end of the financial year. 
5. Know Your Software: Take the time to learn the features of your accounting software. Many platforms offer free tutorials and support to help you get the most out of their tools. 

How to Safely Get Rid of Old Records

You shouldn’t just throw away your old records in the recycling bin after the required time has passed. These papers have private and financial information that could be used for bad things if they get into the wrong hands.

Use a cross-cut shredder to completely destroy physical records. For larger volumes, consider hiring a professional document destruction service. 

You can’t just delete files to get rid of digital records. You can often get back files that have been deleted. Use file-shredding software or make sure the hard drive they are on is physically destroyed to get rid of them for good.

Get Professional Help with Your Business Records

If you want to run a successful business in New Zealand, you have to keep accurate and complete records. It keeps you safe from legal and financial problems, gives you useful information about how your business is doing, and helps you grow in a way that will last. The seven-year rule is a good general rule, but it’s important to know the exact rules for each type of record.

You can make record-keeping a valuable business asset instead of a chore by putting digital first, setting up clear organizational systems, and sticking to your administrative tasks.

If you’re feeling overwhelmed by your record-keeping duties or want to make sure your systems are strong and up to code, don’t be afraid to ask for help from a professional. The Business Kiwi team helps New Zealand businesses confidently meet their compliance needs. Book a consultation with us today to discuss how we can help you build a record-keeping strategy that works for your business.