Private ruling: Business records
Date of advice: 15 June 2015
Published: June 2015
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner provide substantiation relief and accept the business activity statement amounts for the purposes of lodging the tax return for the year ended 30 June 2014? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1936 Section 262A.

Reasons for decision: Summary: Subsection 262A(1) of the Income Tax Assessment Act 1936 (ITAA 1936) imposes an obligation on a person carrying on a business to keep records that record and explain all transactions engaged in by them that are relevant. Taxation Ruling TR 96/7 Income tax: record keeping - section 262A - general principles provides guidelines on record keeping under section 262A of the ITAA 1936. Relevant records to be kept include documents that are relevant for the purpose of ascertaining the income and expenditure. Bank records, such as credit card or debit card statements can be used with other documents to support the relevant income and expenses. Taxation Ruling TR 97/24 Income tax: relief from the effects of failing to substantiate provides guidance on circumstances in which relief from the effects of failing to substantiate may apply. Although this ruling and the associated Division 900 of the ITAA 1997 specifically relate to work, car and business travel expenses, the principals may be applied to other record keeping requirements. A bona fide attempt should be made to comply with the record keeping requirements. In the specific circumstances of this case, the Commissioner will accept the amounts from the business activity statements to ascertain the income and expenses of entity A. These amounts can be used to lodge the relevant tax return.

Relevant facts: The director of entity A had their motor vehicle stolen. | All the business records for a number of previous years and a business laptop were inside the motor vehicle at the time to be transported to a different location. | The theft was reported to police. Neither the motor vehicle nor the files or the laptop have been recovered. | Entity A is registered for GST and had lodged their quarterly business activity statements during the relevant financial year. These statements were prepared based on the original records and reflect the actual income earned and expenses incurred for the relevant financial year.