Keep Good Records
KEEPING good records is very important for tax purposes. It is your responsibility to justify your claims for expenditure, if called upon to do so.
Therefore, the more documentary evidence you keep the better. Sometimes copies of the bills are either not available or are insufficient evidence If you go overseas, keep a diary as evidence of your business activity. A way to keep a reasonable record of casual, low-cost entertaining, such as a coffee shop lunch, is to keep a notebook of the date, cost, who was entertained and a brief note of what was discussed.
Car parking presents a problem. Meters do not provide receipts. You can only do your best. One way of accounting is to put, say, $20 of small change in the car and each time you top it up with another $20 of your own money, draw a cheque to reimburse.
Those who take a work-related vehicle home should be familiar with the IRD requirement for the employer to write to the employee prohibiting its private use. It is worth also getting the employee to sign this letter agreeing to the arrangement.
The employer must check at least once every three months to see the employee is obeying. Do you do this? Do you write a diary note of the date and time of inspection?
The same rules apply if you are the sole shareholder-employee of your own company. Write yourself a letter etc. Laugh if you wish: that is the legal for avoiding Fringe Benefits Tax. Have a pile of blank forms to record you have carried out the inspection and fill them in once a quarter to show you have complied. If there is more than one director, get another to write the letter etc.
If your company borrows money, make sure the documents you sign are on behalf of the company. Banks or lawyers have been known to get this wrong, particularly if the money will be used to buy you a new home. This error can prove expensive.
IRD selected a family trust for a thorough examination. The first thing they asked for was the trust minute book. Are you keeping good trustee minutes?
Be very careful with your paper work especially for major transactions and most especially if you have a family trust.