Lost tax receipts cost one in two Australians $1,000 in tax rebates or $7.3 billion in total, according to a survey by the Commonwealth Bank.
The survey of more than 1,000 taxpayers found that men are three times more likely to be out of pocket from lost receipts, losing $5.5 billion in tax rebates compared to the $1.8 billion lost by women, as men were less likely to be careful about storing receipts in one place.
People aged between 18 and 35 are more likely to misplace receipts than older taxpayers, the survey found.
Most taxpayers misplaced receipts for everyday expenses such as stationery, fuel, parking, tolls, travel and the internet.
Besides the cost of the lost tax rebates, those losing receipts also paid in time, spending an average of 2.2 hours looking for receipts to support their tax return.
The findings follow a survey by American Express earlier this year, which revealed a staggering 39% of small businesses keep their tax receipts in a shoebox rather than lodging them electronically.
Paul Drum, head of business and investment policy at CPA Australia, told SmartCompany substantiating tax claims was an issue for businesses.
“Given that 75% of all Australians go to a tax agent, the number does seem rather high. But certainly we are quite sure that people lose receipts and not everyone has exemplary record keeping practices,” Drum says.
“It serves as a timely reminder that people must be assiduous about claiming what they are properly entitled to under the law. At the individual level, that certainly requires documentary evidence that can be in written or electronic form.”
He says it is “exasperating” for accountants who deal with clients who can’t produce documentary evidence, as accountants want their clients to have the best possible outcome.
Drum says the same lesson applies for business. He says businesses should claim everything they are legally entitled, but should be able to substantiate it if and when required, which means keeping proper records and accounts.
“I think the recent Australian Taxation Office compliance program and some of their data matching and checking excessive claims by certain industries, [such as] plumbers, defence force personnel and IT managers are all examples of where it is going to be more important perhaps to ensure you do have those records,” says Drum.