Announcements
We understand 2020 has been difficult and we're here to try and make it easier during tax time. Search posts, read articles or ask a question.

ATO Community

Re: Record keeping for small businesses - sole traders and companies

Highlighted

Newbie

Views 2461

Replies 5

I have clients who lose receipts all the time. Their accountants tell them a statement or Xero feed with info of the purchase will suffice for tax keeping records. I can't find anything specific on the ATO website regarding this or if individual records don't need to be kept under what circumstances/criteria.

I can see for individuals written notes under $10 to max of $200 but nothing similar in business.

If we lose individual records can we still claim for GST and tax deductions.

 

Regards

 

1 ACCEPTED SOLUTION

Accepted Solutions
Highlighted

Best answer

ATO Certified

Newbie

Replies 3

I recommend you read the information on the ATO website regarding record keeping: https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Keeping-your-tax-records/

Note this is in relation to individuals, but has specific examples on what types of records you need to keep for different deductions you have claimed.

 

You should also check out this page which specifies what records you need to keep in a business context: https://www.ato.gov.au/general/other-languages/in-detail/information-in-other-languages/record-keepi....

 

Generally speaking, you need to keep records for 5 years from the date you lodge your tax return. This would mean that if in 2018, you lodged a tax return relating to the 2010 financiale year, you would need to keep these records until 2023 because it is 5 years from the date you lodge your tax return.

 

For individuals, if they have a myGov account linked with the ATO, they can use the ATO app to take photos of their receipts which securely stores that information online. The ATO app is free to download for apple, android and windows. For more information go to https://www.ato.gov.au/general/online-services/ato-app/.

 

Hope this helps.

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

5 REPLIES 5
Highlighted

Taxicorn

Replies 0

Have a look through :

     

  • TR 96/7 Income tax: record keeping – section 262A - general principles.
  • Or another ATO PDF that I can't find on the ATO site anymore called "Record Keeping For Small Business"  (nat 3029)- There is only one copy that I could find online 

For more information about when the ATO can allow a deduction where you do not have records to prove the expense, refer to Taxation Ruling TR 97/24 Income tax: relief from the effects of failing to substantiate.

 

Highlighted

Best answer

ATO Certified

Newbie

Replies 3

I recommend you read the information on the ATO website regarding record keeping: https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Keeping-your-tax-records/

Note this is in relation to individuals, but has specific examples on what types of records you need to keep for different deductions you have claimed.

 

You should also check out this page which specifies what records you need to keep in a business context: https://www.ato.gov.au/general/other-languages/in-detail/information-in-other-languages/record-keepi....

 

Generally speaking, you need to keep records for 5 years from the date you lodge your tax return. This would mean that if in 2018, you lodged a tax return relating to the 2010 financiale year, you would need to keep these records until 2023 because it is 5 years from the date you lodge your tax return.

 

For individuals, if they have a myGov account linked with the ATO, they can use the ATO app to take photos of their receipts which securely stores that information online. The ATO app is free to download for apple, android and windows. For more information go to https://www.ato.gov.au/general/online-services/ato-app/.

 

Hope this helps.

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

Highlighted

Newbie

Replies 2

Thank you for your reply. I have read all the info and I know the time limits but I am wondering what happens if receipts are lost or not available. Do I need receipts for all amounts or is there a limit for businesses. I have read all the info on the individuals and the small business but I can't find anything about lost receipts or $ limits.

Do you know if this info exists?

thanks

Highlighted

Community Support

Replies 1

Hi @bbdb,

 

Welcome to our Community!

 

@macfanboy and @Morgo95 have provided some very useful information.

 

Generally speaking, if a business doesn't have adequate records to support a claim reported in a Business activity statement (BAS) or Income tax return, we may adjust or deny that claim. The Income Tax Assessment Act 1936 TR 96/7 requires a person carrying on a business to keep records that record and explain all transactions.

 

You can find more general information about managing small business records, including what records are required by law here. Alternatively, if you have further questions you can phone us on 13 28 66 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

Highlighted

Newbie

Replies 0

PErfect, thank you