BAS BASICS – Do I need to keep invoices to claim back the GST?
BAS Basics – Why do I need to keep my invoices? Isn’t it enough that the payment is on my bank / credit card statement?
It is a very common belief that all you need, in order to claim back the GST on your expense, is to be able to show the payment in your bank or credit card statement. What does the ATO say about this?
The ATO is reasonable and says that if you make a payment for an item that costs less than $82.50 ( including GST) then you can claim the GST ( assuming the expense is eligible) without needing an invoice. All you need is to be able to show proof of payment ( ie via a bank statement, credit card statement or receipt. The payment needs to have been made by your business and not by anyone else. Of course you still need to meet the other requirements that allow you to claim back the GST – it needs to be business related, it needs to relate to a service provided in Australia and the supplier needs to be registered for GST ( and so do you).
So when do you need an invoice ? You can only claim GST on expenses that are more than $82.50 ( incl GST) if you have a TAX invoice – not just an invoice ….. not just a receipt showing the amount, a TAX invoice. This is an invoice that shows the suppliers ABN and clearly shows the amount of GST paid.
It is another common belief that AMEX statements are a good replacement for an invoice, but unfortunately the ATO says NO. Amex statements do not separately report the GST component of the transaction so a TAX invoice is still required.
You need to keep your invoices, in case of an ATO audit, for a minimum of 5 years. It is a good idea to save all of your invoices in Xero – manually attach them to your bills , email them into Xero or use software such as Hubdoc or Dext to scan and import them to Xero. This allows Xero to become your filing system and you can say goodbye to ugly folders or shoeboxes of invoices.
If you want any suggestions on how to better manage your invoices, to make sure you are claiming all of the GST credits that you can, send me a message. Balanced Advantage are always here to help.