Good records are the difference between a 20-minute BAS and a stressful audit — and they are what protects every deduction you claim. The ATO does not want shoeboxes (digital is fine) but it does want the right things, kept the right way, for the right time. Here is what that means for a tradie.
How long — and the start date that trips people
"Five years" hides three different start dates:
- General business records (invoices, bank statements, BAS, payroll): 5 years from when you prepared/obtained them or the transaction completed — whichever is later.
- Deduction evidence (receipts backing a claim): 5 years from the date you lodge that return.
- Depreciating assets (the ute, big tools): 5 years after the last year you claim depreciation — which can be a decade for a vehicle.
What the ATO wants for the big claims
For the areas it reviews most, you need evidence of cost AND evidence of the business-use percentage:
- Vehicle: purchase and running-cost receipts (rego, insurance, fuel, servicing); a logbook (12 continuous weeks — date, odometer, destination, purpose) or a reasonable basis for cents-per-km; and the business-use % worksheet.
- Tools/equipment: receipts (supplier, amount, description, date, GST); a note of the work-use % for dual-use items; and depreciation records (cost, effective life, method).
- Home office: utility bills; a floor-plan/measurements for the area percentage; and a 4-week representative diary of business hours if you use the time-based method.
Digital is fine — the rules
The ATO accepts photos and scans if they are a true and clear reproduction. A valid receipt image must show the supplier's name, the amount, what it was for, the date paid, the date of the document, and the GST if applicable. Once you have a clear digital copy stored and accessible for the full 5 years you can bin the paper — though keep faint or handwritten originals until you are sure the scan is legible and backed up. The ATO myDeductions app and the receipt-capture in Xero/MYOB/QuickBooks all count.
Cloud tools (what they do for AU tax)
Xero, MYOB (including Solo for sole traders) and QuickBooks Online AU all handle GST coding, BAS summary reports, and flagging contractors for TPAR — though the automation varies by plan, so check whether yours includes the TPAR report or just exports the data for your accountant. Pick what your bookkeeper actually uses; the best system is the one you keep up to date.
The small-cash exception
For expenses under $10, you may not need a receipt if you keep a diary note and the total of such expenses stays under $200 a year — but honestly, just snap a photo.
Common mistakes
- Binning receipts after a year — the deduction clock is 5 years from lodgement.
- No logbook, then claiming the ute anyway.
- Assuming employer super records are 10 years — that is SMSF trustee records; employer SG is 5.
- Keeping the data but not for the whole 5 years, or not accessible.
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