Tax deductions are the main way you can improve your tax refund. In simple terms, deductions add fairness to the tax system; if you have to spend extra money that connected with how you earn a living, then you get something back for that.
The ATO prefers that you keep a receipt for every expense that you purchase and want to claim on your tax return. But what happens if you don’t have a receipt? What if you lost it, or it’s so faded that you can’t read it?
Claiming with no receipt is becoming a bit risky, because the ATO is becoming stricter with each year that passes, but in some cases it is okay.
You might still be able to claim certain items, even without a receipt
There are cases where you can claim a tax deduction without a receipt, but there are serious restrictions.
First of all, the expense must be “allowable”. This means you should be able to answer yes to these questions.
- It’s directly related to and needed for your occupation?
- You paid for it yourself?
- You were not reimbursed or paid back by your employer (or anyone else)?
If you answered yes to all of the above, and you have a credit card statement or bank statement showing transactions for the item or items you purchased, then if push comes to shove with the ATO, they will sometimes accept that deduction. However, you should not let yourself get into that situation. Because if they disallow your deduction, you may soon be paying money back to the ATO and this is a position that nobody desires to find themselves in.
If a purchase you made contained some items you’re allowed to claim, and some that you can’t, that’s complicated. You need some sort of way to distinguish between the work expenses and the personal or un-claimable items.
What are some common items that you might be able to claim without a receipt?
- Membership Fees or Union Fees: These will often be itemised on your PAYG summary or Income Statement or another summary you get from your employer or tax agent. As long as you have that documentation, a receipt is not normally required.
- Fuel/Petrol with a logbook: If you keep a proper car logbook for at least 12 consecutive weeks (over a 5-year period), then you can use the work-related kilometres you’ve travelled along with the size of your car and a nominal fuel rate to include a petrol deduction on your return. Your tax agent can help work this out for you.
- Fuel/Petrol without a logbook: Even if you haven’t kept a car logbook, as long as you can demonstrate how you calculate the number of kilometres you’re claiming, the ATO will allow a claim of 72c per kilometre up to a maximum of 5,000km.
- Computer Items: If you have a credit card statement and you make a note against it (for example new home office computer from JB Hi-Fi) at the time of the purchase, it’ll be easier to find and use as evidence. It also helps if you take a photo of the packaging, as well – but if you can take a photo of the package, take a photo of the receipt!
- Stationery: If you have a credit card statement and you make a note against it (for example; Big W, calculator, ruler, pack of pens). Again, it helps if you take a photo of the items as well.
What the ATO doesn’t accept as proof for deductions with no receipt
It’s important to mention that there are some forms of evidence the ATO will never accept when you try to claim a work-related tax deduction without a receipt. These include:
- Paying for something using cash. “I have no records, I paid cash” is not an excuse, as far as the ATO is concerned. If you say that to them, they will disallow your deductions.
- Having an item with a price tag attached, but no evidence you purchased it. The price tag doesn’t mean anything in this case.
- A catalogue or advertisement with the price of an item, but no evidence you purchased it.
How much can I claim with no receipts?
The ATO generally says that if you have no receipts at all, but you did buy work-related items, then you can claim them up to a maximum value of $300.
Chances are, you are eligible to claim over $300. This could boost your tax refund considerably. However, with no receipts, it’s your word against theirs. The ATO says, no proof, no claim, so keep your receipts year-round. Otherwise you’re sort of stuck below that $300 limit.
Even if you only claim below $300, you should be ready to explain what it was, how you paid for it, and how it is related to your work.
Claiming deductions without a receipt can be a tricky part of doing your tax return and it is certainly not recommended. Often this means you lose out on tax deductions, or even cause some ATO trouble for yourself.
It’s both easy and important to keep your receipts throughout the year so you never miss out at tax time; this will save you money.
More Advice To Assist You With Saving Your Receipts
Keep all of your receipts in one folder or box, all year round. If you are unsure about whether or not you can claim it? Keep the receipt, and ask your tax agent later.
If the ATO decides that you made a claim you shouldn’t have, not only will you have to pay back part of your tax refund (with interest), but you may also end up with a fine if the ATO thinks you were being way too sneaky.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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