Can I claim expenses without a receipt?
Do you claim tax deductions when you don’t have a receipt? Claiming expenses with no receipts is risky as the ATO is getting much better at data matching individual tax return deductions than previous years, but in some cases it is okay! Let’s dig into this and try to avoid ATO troubles.
Tax deductions are the main way you can improve your tax refund. Deductions add fairness to the tax system; if you have to spend extra money that is connected with how you earn a living, then you get something back for that by having a lower tax bill.
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. You will still need to show how you worked this out. Chances are, you are eligible to claim more than $300. This could boost your tax refund considerably. However, with no receipts, it’s your word against theirs – guess the winner!
Additionally, can I claim food expenses and without receipts? You cannot deduct your regular living expenses under any circumstances. When your work situation obliges you to eat in a company cafe, or when you cannot get home to eat, you may deduct food expenses with receipts. In almost all circumstances, being able to deduct food/accommodation expenses relies on having a bona-fide allowance on your STP summary.
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? A good way around this is to take a picture and keep it in your online cloud.
As tax time approaches, Australians are thinking about collecting receipts and other records to help them get a handy refund soon.
Receipts are the easiest way to satisfy the Australian Taxation Office that your deduction is real, but there are some deductions where receipts are unnecessary or impossible to get.
The ATO understands this but is warning that you need to prove how you calculated all your deductions, usually with some form of written evidence or secondary record such as bank statements.
Home office usage, work-related car expenses and uniform costs are among the deductions that don’t always require receipts. Instead they require a diary of time used for internet/mobile/home office.
A News Limited study found that on average Australian taxpayers miss out on $436 worth of deductions or a potential $131 extra in their refund, and simply by not claiming all the deductions they’re entitled to.
Work-related expenses refer to car expenses, travel, clothing, phone calls, union fees, training, conferences and books.
So really anything you spend for work can be claimed back, up to $300 without having to show any receipts. Easy right? This will be used as a deduction to reduce your taxable income. Therefore, you will pay slightly less tax and get more money back. Always a bonus!
So what exactly can you claim back?
Travel is moving from one place of work to another. A common misconception on this is that you can claim from home to work and back, this is not the case. So no need to start adding up how many times you took an Uber to work in the last year because you missed the bus! If you had to head to another part of town or another office location to do a course, then that travel can be counted.
Uniform can be claimed for if it’s specific to the work you do. If the T-shirt you have to wear has a company logo on it or its regulation and you had to buy it, you can claim. You can then also claim for dry-cleaning those t-shirts. So add up how much you spent on washing them over the last year and you can include that in your $300.
If you do courses such as Barista training or RSA, then you can claim back the amount you’ve spent. Just let us know which course you did and how much it was, and we can put in the claim.
Suppose you work in a more skilled labouring job you can claim for tools and equipment. For example, if you had to buy your own paintbrushes if you are a painter.
Phone and internet also count as work-related expenses. Maybe you had to call or email a few customers from your personal phone or laptop if so you can claim a proportion of your bill back to include that.
If you lodged a tax return last tax year and had to pay fees they can also be claimed back, so add them to your $300 claimed without receipts.
You might still be able to claim those items, even without a receipt
There are cases where you can claim a tax deduction without a receipt, but there are serious restrictions.
Firstly, the expense must be “allowable”. This means you should be able to answer yes to these questions.
- Is it directly related to and needed for your occupation?
- Did you pay for it yourself?
- Were you not reimbursed or paid back by your employer (or anyone else)?
If you can say yes to all that, and you have a credit card statement or bank statement showing transactions for the item(s) you purchased, then if push comes to shove with the ATO, they will sometimes accept that deduction. But you should not let yourself get into that situation! Because if they disallow your deduction, you may soon be paying the money back to the ATO that you’ve already received and spent! Nobody likes that.
If you purchase contains both personal and business items, you’re allowed to claim the business portion only. You need some sort of way to distinguish between the work expenses and the personal or un-claimable items. We can help with that!
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 (under 5 years old), then you can use the a business portion of your total car expenses for the year; fuel/registration/insurance/repairs/interest on a loan are all claimable.
- 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 (e.g. 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 or keep the receipt in your email.
- Stationery: If you have a credit card statement and you make a note against it (e.g. Big W, calculator, ruler, pack of pens). Again, it helps if you take a photo of the items as well.
What the ATO does NOT 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.
With tax time here once more, the Australian Taxation Office (ATO) has taken the opportunity to issue a fresh ‘health warning’ on how to avoid incorrect claims for work-related expenses best.
The ATO’s media release highlights three golden rules for getting your expense claims right:
- You have to have spent the money yourself (and not have been reimbursed);
- The claim must be directly related to earning your income; and
- You need a record to prove you have incurred the expense.
The ATO also highlights its ability to use real-time data to compare your expense claims with people in similar occupations and income brackets. This is a sophisticated technological process which means the ATO are readily able to detect non-compliance. This detection process should not be under-estimated, and it is, for this reason, it is important to get your expense claims right the first time, to ensure that you do not inadvertently increase your risk of audit or review by the ATO.
It is worth noting the ATO also used the media release to pour cold water on the popular myth, that you can make a ‘standard’ expense claim of $300, without having spent the money. This confusion stems from the fact that while you do not need receipts for expense claims of up to $300, you must have incurred the expense and can be called upon to support this. From a practical perspective, keeping receipts for all of your expense claims is by far the safest approach, no matter how onerous this may seem. In this regard, the ATO suggests its myDeductions tool accessible through its app can assist both individuals and sole traders.
The other common trap covered, is the ability to make expense claims for uniforms (which have to be unique and distinctive) or other work-related clothing (which needs to be specific to your occupation). In other words, you cannot claim expenses for everyday clothes even if you only wear them to work and your employer requires this. The example used is the requirement by your employer, that you wear black pants and a plain white shirt (most common in the hospitality industry).
The deductibility of employee travel costs still confuses people, and this is covered in a draft ruling recently issued by the ATO. The general rule remains that your ordinary costs for travelling between home and your regular work location are not deductible. Very broadly, transport expenses (e.g. car, bus, train or airfares) are deductible where the travel is undertaken in performing your work activities.
Whether your travel is deductible, is very much a question of fact, but the draft ruling specifies that you also have to consider whether:
- Your work activities require you to undertake the travel;
- You are paid, directly or indirectly, to undertake the travel;
- You are subject to the direction and control of your employer for the period of travel; and
- These factors have been contrived to give private travel the appearance of work travel.
The ATO website is peppered with good quality guidance on work-related expenses in many different ”user-friendly” forms that can be readily accessed. You should follow the ‘golden rules’ highlighted above and keep your tax agent happy, and it is important that you:
- Keep a close track of your work-related expenses throughout the year;
- Retain the appropriate receipts or other documentation in support of your claims; and
- Be in a position to explain the work-related nature of your expenses.
If you seek any further clarity or guidance around how to avoid incorrect claims for work-related expenses best, we encourage you to contact your local adviser for more information.
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 (in total, not per item).
Chances are, you are eligible to claim more than $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.
What receipts should I save for taxes?
Here’s a list of expenses you can itemise and receipts you should hold on to business use of your car and home: Keep receipts of household expenses, including rent, electricity, gas, water, insurance, and repairs. An estimated value for the item must be included on the receipt.
How much can I claim for the cost of managing tax affairs?
This comes as Labor proposes to limit the deductibility for the cost of managing tax affairs to $3,000 on the back of ATO data which showed that, in 2016–17, 69 people earned more than $1 million but paid no tax, with 27 of them claiming an average $607,000 for the cost of managing tax affairs.
How much travel expenses can I claim?
Cents per kilometre: You can claim a flat rate of 72c per kilometre for every business kilometre you cover. You’ll need to keep a diary of all work-related journeys so you can work out how many kilometres you’ve travelled for work. This method can only be used for claims up to 5,000 km’s per vehicle.
Can I claim my phone on tax?
Claiming mobile phone, internet and home phone expenses. If you use your own phones or internet for work purposes, you may be able to claim a deduction if you: paid for these costs and. Have diary records to support your claims.
Are work clothes tax deductible?
Work clothes are tax-deductible if your employer requires you to wear them everyday, but they cannot be worn as everyday wear, such as a uniform with a logo. Deduct them the year you buy them.
What can I claim on my taxes in 2021?
Many deductions are well known, such as those for work-related expenses, accounting fees and charitable donations. You can also deduct income protection insurance (paid outside super) & superannuation concessional contributions.
Do you need receipts for taxes?
You do not need to send in proof of your expenses, like receipts, when you submit your Self Assessment tax return. You will need to keep records of expenses for five years after you submit your return for that tax year.
Use These Tricks to Help Save Receipts = Valuable Tax Deductions Later
Keep all of your receipts in one cloud folder or box, all year round. Not sure if 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 way too sneaky.