If SARS ever queries or audits you, the difference between a quick "all in order" and a painful, expensive ordeal is your records. Here's exactly what South African businesses need to keep, and for how long.
The five-year rule (and longer)
The general rule under the Tax Administration Act is that you must keep records for five years from the date you submitted the related return. But there are important extensions:
- If SARS is auditing or you're in dispute, keep everything until it's fully resolved.
- Company accounting records must be kept for seven years under the Companies Act.
- If you haven't filed a return that was due, the clock doesn't even start.
When in doubt, keep it for seven years.
What you must keep
Broadly, anything that supports the figures on your returns:
- Sales records — invoices you issued, quotes, and receipts
- Purchase records — supplier invoices and bills, and slips for expenses you claim
- Bank records — statements for every business account
- Payroll records — payslips, IRP5s, EMP201s and EMP501s
- VAT records — tax invoices (in and out), VAT201s and the calculations behind them
- Asset records — what you bought, when, and for how much (for depreciation and capital gains)
- The accounting records themselves — your ledgers, trial balance and financial statements
Digital is fine
SARS accepts records kept electronically, as long as they're accessible and can be reproduced. In fact, digital records are safer — they don't fade, get lost, or fill a cupboard. Just make sure they're backed up.
The "no slip, no deduction" trap
The most common way businesses lose money to SARS is by not keeping proof of expenses. If you can't show the invoice or slip, you can't claim the deduction — even if the expense was genuine. Capture every business expense as it happens.
Stay audit-ready by default
The businesses that sail through SARS queries are the ones whose records are already organised — not scrambled together at the last minute. 360books keeps your invoices, bills, bank records, payroll and VAT together in one place, retained for the periods the law requires, so you're always audit-ready without thinking about it.