Do not be fooled by “no receipts required” tax deductions

With the ATO continuing to focus heavily on work-related deductions, one of the most common issues that arises in reviews and audits is not whether an expense was potentially deductible, but whether the taxpayer can prove it. If you cannot demonstrate what you spent and why it relates to earning your income, the ATO may deny the claim, even where a concession applies.

The starting point: the taxpayer must prove the deduction

For most deductions, the burden of proof sits with the taxpayer. This means that if the ATO requests evidence, you may need to produce:

• receipts or invoices

• records showing what was purchased

• proof of payment (such as bank or credit card statements)

• supporting notes explaining the work-related purpose

Records are not lodged with your tax return, but they must generally be kept for five years from the date you lodge. In many cases, the ATO will also ask for an explanation of how the expense connects to your employment duties, meaning the best evidence is often broader than just a receipt.

What the ATO expects for common deductions

Different categories of deductions have different record-keeping rules. Examples include:

Work-related car expenses

Depending on the method used, you may need either:

• a logbook (typically maintained over a continuous 12-week period), and records of running costs, or

• a reasonable basis for kilometres claimed under the cents per kilometre method

  
  

Work-related travel

Claims usually require receipts and documentation showing the trip was connected to work. Where travel lasts more than six nights, a travel diary is commonly required to support the business purpose.

Clothing, laundry and dry-cleaning

If you are claiming laundry expenses, you still need a clear basis for the calculation. For larger claims, full documentation is usually expected.

Self-education expenses

The ATO generally expects receipts for course fees, textbooks and related costs, as well as evidence that the study has a sufficient connection to your current income-producing role.

Working from home

Even where a fixed rate method is used, you must be able to support the hours worked and retain records for relevant household expenses where applicable.

Other work-related expenses

You should keep invoices and documents that demonstrate the expense was incurred and directly relates to earning your income.

Depreciating assets (including low-cost items)

You should retain purchase documents and working papers showing how depreciation has been calculated, particularly where assets fall into simplified depreciation or pooling rules.

Gifts and donations

The ATO expects receipts confirming the donation amount and that the recipient is a deductible gift recipient (DGR).

“Valid receipts” are not just receipts

Even where a taxpayer has kept documents, claims can still fail if the evidence is not acceptable.

Common issues include:

• receipts that are illegible

• invoices issued to another person (not the taxpayer)

• missing supplier details

• unclear descriptions of what was purchased

• no proof the expense was actually paid

For that reason, it is sensible to keep both the invoice and evidence of payment, particularly for higher-value deductions.

The substantiation concession trap

Some taxpayers believe that where the rules say “no receipt is required”, the ATO cannot ask further questions. That is not correct.

A substantiation concession generally means you may not need a specific type of evidence (such as a receipt), but you still need to demonstrate:

1. the expense was incurred, and

2. it was incurred in earning your assessable income, and

3. the claim has been calculated on a reasonable basis

In other words, you may still need to prove the claim, just in a different way.

Common examples where the ATO still expects strong evidence

1. Work-related vehicle expenses (where a logbook is not mandatory)

For certain vehicles that are not classified as “cars” under the tax rules, the traditional logbook method may not apply. However, the ATO can still expect evidence showing:

• how the work-related percentage was determined, and

• the running costs actually incurred (fuel, servicing, insurance, registration)

Even when not strictly required, a logbook-style record is often the clearest way to support a claim.

2. Laundry claims under the small claim threshold

Where a laundry claim falls under the threshold and receipts are not required, the taxpayer still needs to show how the figure was calculated, for example:

• number of loads per week

• number of weeks worked

• the rate applied per load

A reasonable calculation is still evidence.

3. Travel claims based on the Commissioner’s reasonable amounts

Using reasonable amounts can reduce the need to keep every receipt for meals and incidentals, particularly for work travel.

However, the ATO can still request evidence such as:

• proof the travel occurred

• booking confirmations and itineraries

• bank transactions supporting that costs were actually incurred

• records showing the travel was work-related (including diary-style notes for longer trips)

  
  

In practice, taxpayers often end up needing close to full documentation anyway.

Why this matters more than ever

Work-related deductions remain a consistent focus area for the ATO, particularly where claims are higher than average or appear inconsistent with income levels or occupation benchmarks.

A recurring pattern in audits is that deductions are not denied because the category is incorrect, but because the taxpayer cannot support the claim with enough evidence. Substantiation concessions can give a false sense of security, and taxpayers are often surprised when the ATO asks for detailed proof.

The practical takeaway

If you are claiming deductions, the safest approach is:

• keep receipts where possible, even if a concession exists

• retain proof of payment

• maintain clear calculations and notes explaining work-related use

• keep records in an organised way for at least five years

  
  

Good record-keeping is not just about compliance. It is what protects your deduction if the ATO ever asks questions.

Need help?

If you are unsure whether a deduction is claimable, or what records you should be keeping to support your claims, our team can help.