Online shopping and other peer to peer marketplaces such as Gumtree are a great way for businesses to purchase assets such as furniture at a reduced cost compared to retailers and save valuable time that you would have to spend travelling to the shops. However it is extremely important that enough evidence is provided to prove claims to the ATO. These tips below will assist you in verifying claims for online purchases and avoid trouble with the ATO.
Ensure there is documentation to confirm the purchase
To validate the online purchase, it is most important that you provide documentation to prove the purchase was made. The document should include:
- Name of the seller
- Date the document was created
- Date of the transaction
- Nature of goods or services purchased (you may write if the supplier does not specify)
- The expense amount, in the currency it was incurred
A bank statement showing confirming the purchase amount and the date you incurred the expense can be used as substantial evidence.
Prepare your own documentation
This is more likely to be necessary if you purchase off an individual as opposed to a business.
Individuals may just be selling something to get rid of it and therefore don’t provide the documentation you require. If this is the case, prepare a document containing the necessary information about the online purchase as stated in the previous tip and then get the seller to sign the document to confirm the purchase.
Keep photos and screenshots involved in the buying process
Do not delete any messages between yourself and the seller and take screenshots to use as backup in case any messages that can be used as evidence get lost. A screenshot of the item being advertised and a photo of any exchange are a good source of evidence.
Keep related receipts
These may not be directly related to the transaction, but may help show that a transaction took place at a particular time or place such as a bank withdrawal or another purchase at the place the transaction took place.
Source: McKinley Plowman
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This article is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Integrity One Planning Services Pty Ltd is a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 (which is the holder of AFSL 225051). Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. We recommend that you seek personal advice from an advisor prior to implementing any of the information contained in this publication.