ATO, tax expert confirm Aussies no longer have to save paper receipts

MANY Aussies are still making this big tax time mistake every year — even though the law changed almost two decades ago.

MANY of us are still hanging onto paper receipts even though this hasn’t been necessary since 1999 — and it’s causing unnecessary stress at tax time.

Entrepreneur, accountant, financial adviser and best-selling author of Unf*ck Your Finances Melissa Browne said the belief that you need to keep physical receipts as evidence for tax purposes was surprisingly widespread.

Ms Browne told news.com.au the misconception had somehow persisted, even though the days of being legally required to hold onto physical receipts were long over.

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“I see a lot of people get it wrong this time of year — they think because they didn’t keep their receipts, there’s nothing they can claim — but this is easy to tackle, because if you handed over your credit or debit card and you have a bank statement, that’s good enough,” she said.

“Head online and find your statement and find all the things you spent money on — whether it’s your phone, parking or tools, because the ATO says a statement is good enough proof.”

Ms Browne said photographic records of physical receipts were also perfectly adequate — which meant it was no longer necessary to keep receipts at home on file.

“Even if you pay cash for something, you can take a photo of the receipt with your phone, and that’s good enough,” she said.

“So if you’re a tradie and you pay for your tools with cash at a market, you can take a photo of the receipt and then throw it away because the ATO says that’s fine.”

Ms Browne warned that proof of purchases were still needed, and that Aussies couldn’t simply claim an approximate amount spent.

But she said tax payers shouldn’t be intimidated by ATO crackdowns.

“The ATO does come out and scare people this time of year, but if you have real work-related expenses you can substantiate, don’t be put off,” she said.

Ms Browne said poring over bank and credit card statements often helped jog people’s memories regarding things they can potentially claim, but might have forgotten about.

“It’s also important to remember if work sends you overnight to a conference, you can claim food including dinners and breakfasts,” she said.

“Even if you handed your card over at McDonald’s during an overnight stay, you can claim that.

“You tend to forget what you did last year, so sit down with your bank statement and calendar and you might remember buying coffee, food and drinks during a conference last year.”

An Australian Taxation Office (ATO) spokesman confirmed that digital records were perfectly legal.

“A photograph of a physical receipt is an adequate record provided it is a true and clear reproduction of the original,” the spokesman said.

“The law has permitted the use of electronic record keeping since 1999 and the ATO originally published our Law Administration Practice Statement PS LA 2005/7 substantiating an individual’s work-related expenses in April 2005.

“We also recommend taxpayers back up and keep physical copies of electronic records so claims can be substantiated in the future if necessary.”

The spokesman urged tax payers to visit the ATO website for more details on work related expenses.

He also advised Australians to make use of the myDeductions tool in the ATO app, which helps individuals and sole traders alike to keep all their tax deductions and income records in one place.

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