What records to keep in NZ

Quick answer

In New Zealand you generally have to keep your business records for seven years. That covers income and expenses, bank statements, invoices, receipts, GST records, asset purchases, and your wage and payroll records. They can be kept digitally, you do not have to keep shoeboxes of paper, as long as the records are complete, legible, and in English (or te reo Māori).

The reason the rule matters is simple: if you cannot evidence a deduction, IRD can disallow it. A receipt you can find in seconds is a deduction you keep.

The detail, in plain English

The seven-year retention rule is the headline. Here is what falls under it, and how long each piece needs to live:

Digital is fine, and better. IRD accepts electronic records, so photographing receipts and using accounting software meets the rule while making everything searchable. Bank feeds in software like Xero capture the transaction, and you attach the receipt image to it, so the evidence and the entry live together.

A few records are worth holding even longer than seven years in practice, particularly anything tied to an asset you still own (its purchase records support depreciation and the eventual sale calculation) and property documents relevant to the bright-line test.

A simple example

Lena buys a $4,000 laptop for her business and claims depreciation on it over several years. Four years later, IRD reviews her return and asks her to support the deduction.

• Because she photographed the tax invoice and attached it to the transaction in her software, she finds it in seconds and the depreciation stands.
• Her business bank account shows the matching $4,000 payment, so the purchase is corroborated.

Now imagine the receipt was a fading thermal slip lost in a drawer. The same legitimate deduction could be disallowed simply for want of evidence, costing Lena tax she should never have paid. The asset record is also the document she will need when she eventually sells or scraps the laptop, which is why asset paperwork is worth keeping beyond the basic seven years.

Common mistakes to avoid

• Relying on bank statements alone. A statement shows a payment but not what it was for; a deduction needs the supporting invoice or receipt too.
• Keeping thermal receipts as paper. They fade to blank within a year or two. Photograph them straight away.
• Binning records after one or two years. The rule is seven, and longer for assets.
• Mixing personal and business spending. It makes records ambiguous and weakens claims. A separate business account fixes it.
• No backup. Digital records still need to be safe. Cloud accounting software handles this for you.

Where this fits in your return

Records are the foundation under every figure on your IR3, IR4, and GST returns. They are what lets you claim deductions confidently, and what you reach for if IRD reviews a return within the retention window. Clean records also slash the time, and therefore the fee, of preparing your year-end accounts, because nothing has to be reconstructed.

How Fernway can help

We will set you up with a simple, IRD-compliant record system, usually cloud accounting with receipt capture, so keeping records is something that happens automatically rather than a chore you dread. Tidy records mean faster, cheaper year-ends and deductions that hold up if they are ever questioned.

This is general information only, not personalised tax advice. Your situation may differ, so book a free 20-minute review and we will get your record-keeping sorted.

In plain English: keep your business records for seven years, digital is fine, photograph receipts as you go, and hold on to anything about assets you still own for longer.