What is the $300 rule for receipts?

For work-related expense claims of $300 or less in total for the year, individuals don't need written evidence for every item, though you still need to be able to show you spent the money and that it relates to earning your income. This is a narrow exception for employees' personal tax returns, it does not apply to GST credit claims or to most business expense claims, which need a tax invoice regardless of amount.

Do I need a tax invoice to claim GST credits?

Yes. To claim GST credits on a purchase over $82.50 (GST inclusive), you need a valid tax invoice from the supplier. A bank statement showing the payment is not sufficient evidence for a GST credit claim, regardless of the amount. This is one of the most common issues picked up in ATO reviews of small business GST claims.

What happens if I only have bank statements in an ATO audit?

The ATO can disallow the deduction or GST credit if you can't substantiate it with proper evidence. In practice, reviewers will sometimes accept bank statements alongside other supporting evidence, like a diary note, an email confirming the purchase, or a reconstructed record, but a bank statement by itself is weak evidence and puts the claim at real risk of being knocked back.

What's the easiest way to keep proper records?

Photograph or scan every receipt at the time of purchase using a receipt-capture app like Dext or Xero's built-in capture, rather than relying on memory or bank statements later. Most apps extract the supplier, date and amount automatically and attach the image to the transaction in Xero, so you have both the bank record and the actual receipt sitting together when it's time to lodge.

Can I Use Bank Statements as Receipts for Tax in Australia?

Q: Can I use bank statements as receipts for tax in Australia?

Generally, no, not on their own. A bank statement shows that money left your account, but the ATO wants evidence of what you bought and why it was for business. A tax invoice or receipt showing the supplier, date, amount and description does that job. A bank statement alone can't show whether a $340 payment to a hardware store was materials for a job or a personal purchase.

Published August 2026By True Tally Bookkeeping7 min read

Why a Bank Statement Isn't Enough on Its Own

A bank statement tells the ATO one thing clearly: money left your account, on a certain date, for a certain amount. What it doesn't tell them is what you actually bought, whether it was for the business, or whether it was GST-inclusive. A $340 payment to a hardware store could be timber for a client job, or it could be decking for your own back deck. The bank statement looks identical either way.

This is why the ATO's substantiation rules ask for a document that describes the supply, not just the payment. A proper receipt or tax invoice shows the supplier's name, the date, a description of what was purchased, and the amount, sometimes broken into GST and GST-free components. That's the evidence that actually supports a deduction or a GST credit claim.

        Bank statements are a useful cross-check, not a substitute. They're great for reconciling that a transaction happened. They're weak evidence for proving what it was for.
      

The $300 Rule, and Where It Doesn't Apply

There's a genuine exception that causes a lot of confusion: individuals claiming work-related expenses on their personal tax return don't need written evidence if their total work-related claims for the year are $300 or less. You still need to be able to show, if asked, that you spent the money and that it relates to your income, but you don't need a receipt for every single item under that combined $300 threshold.

It applies to individual work-related expense claims only, not business expenses run through a company, trust, or GST-registered sole trader ABN
It's a total across all your work-related claims for the year, not $300 per item
It does not remove the need for evidence entirely, it just relaxes the requirement for a receipt for every single small item

For a Geelong tradie or business owner running purchases through the business, this exception rarely helps. Most business expenses need proper documentation regardless of amount, especially once GST is involved.

GST Credits Need a Tax Invoice, Full Stop

If you're registered for GST and want to claim the GST credit on a purchase, the rule is stricter than the general substantiation rule. For any purchase over $82.50 (GST inclusive), you need a valid tax invoice from the supplier to claim the GST credit. A bank statement showing the payment left your account is not acceptable evidence for this claim, no matter how clearly it's described.

This catches businesses out constantly. A supplier gets paid via bank transfer, the bookkeeper enters the transaction from the bank feed, GST is claimed by default because the supplier is normally GST-registered, but no tax invoice was ever actually collected. In a review, that GST credit is at real risk of being reversed.

Claim type	Is a bank statement enough?
GST credit on a purchase over $82.50	No, a valid tax invoice is required
Individual work-related claim, total under $300	Often acceptable on its own, evidence still helps
Business expense deduction, any amount	No, a receipt or tax invoice is expected
Motor vehicle expenses (logbook method)	No, needs a logbook plus receipts for running costs

What Happens in an ATO Review With Only Bank Statements

If a claim is reviewed and all you can produce is a bank statement, one of a few things typically happens. The reviewer may accept it alongside other corroborating evidence, an email confirming the purchase, a supplier's own transaction history, or a reasonable reconstruction of what the payment was for. Or, if there's nothing else to go on, the deduction or GST credit can simply be disallowed and added back to your taxable income, sometimes with penalties and interest on top.

The bigger the claim, the more scrutiny it tends to attract, and the weaker "I'm pretty sure it was for the business" becomes as a defence without paperwork behind it.

Record-Keeping That Actually Holds Up

The fix is simpler than it sounds, and it's mostly about timing. Capture the receipt at the point of purchase, not months later trying to remember what a bank line item was for.

Photograph or scan every receipt as soon as you get it, using your phone or a dedicated app
Use a receipt-capture tool like Dext or Xero's built-in capture, which reads the supplier, date and amount automatically and attaches the image to the matching bank transaction
Keep tax invoices for anything over $82.50 where you plan to claim GST, ask for one at the register if it isn't provided automatically
Store records for five years, the ATO's standard retention period for most tax records

Reconstructing Records if You've Already Lost Receipts

If you're behind on this and facing a review with gaps in your records, all isn't lost. Bank and card statements, supplier invoices requested retrospectively, diary notes, and even photos of the purchased item can help build a reasonable reconstruction. It's more work than keeping things tidy in the first place, but the ATO does allow for genuine attempts to reconstruct records where the originals are lost, particularly if you can show you're making a real effort rather than guessing.

Looking for a bookkeeper in Geelong? True Tally provides fixed-fee bookkeeping, BAS lodgement and payroll for small businesses across Geelong and the Surf Coast.

True Tally: record-keeping that survives a review

We set Geelong businesses up with receipt-capture that runs alongside Xero, so nothing gets left to memory. Book a free call to see how it fits your business.

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