What to Do If You’ve Lost Your Receipts and the ATO Is Asking

It is the letter every business owner dreads: "We are auditing your tax return. Please provide evidence for the following deductions..."

Your heart sinks. You know you spent the money legitimately, but the thermal paper receipts from Officeworks faded months ago, or you simply lost the shoebox during a move. Does this mean you have to pay the money back with fines?

Not necessarily. While the ATO prefers tax invoices, tax law allows for alternative substantiation in certain cases. Here is what to do if you can't find the paper trail.

1. The "Bank Statement" Defense

Many business owners think a bank statement is enough. It isn't. A line on your statement saying "Bunnings - $145" doesn't prove you bought business tools; you could have bought a BBQ for your backyard.

However, a bank statement combined with a notation can work. If you have the date, the vendor, the amount, and a clear description of the nature of the goods, the ATO may accept this if the expense is reasonable for your industry.

2. Requesting Duplicate Invoices

This is your strongest option. Most major suppliers keep records for 5 to 7 years.

• Bunnings/Officeworks: If you scanned a "PowerPass" or loyalty card, you can download old invoices online. Even if you didn't, if you have the exact date and credit card number used, their commercial trade desk can often reprint the receipt.
• Software Subscriptions: Check your email archives for "billing@xero.com" or "receipts@adobe.com". These digital receipts are fully valid.

3. The $300 Rule (Total, Not Per Item)

There is a common myth that you don't need receipts for anything under $300. This is incorrect.

The rule is that you do not need written evidence if your total claim for work-related expenses is $300 or less. Once your total claim hits $301, you theoretically need written evidence for everything, not just the excess.

4. Can I Use a Statutory Declaration?

If you have exhausted all other options—the receipt is destroyed, the supplier has gone bust, and you have no bank record—you can provide a Statutory Declaration (a legal document witnessed by a JP).

5. Disaster Provisions

Did you lose your receipts due to a flood, fire, or theft? The ATO has specific "disaster provisions." If you can provide a police report or insurance claim proving the records were destroyed in an event beyond your control, they will generally allow you to claim a "reasonable amount" based on your previous years' patterns.

Summary

The best defence against an audit is a good offence. Stop relying on paper receipts today. Apps like Dext or Hubdoc allow you to snap a photo of a receipt and push it straight into Xero, so you never have to worry about fading ink again.