What can I claim?
A PENSIONER got remarried and decided to rent out her former home. It was one of a group of houses.
A tradesman made an offer to a group of house owners, including hers, to clean all their windows for $100 each.
“I gave a neighbour $100 to pass on to the tradesman, but since I didn’t get a receipt I assume I can’t claim it,” she said.
Tax law does not say anything about the need for a receipt. Claiming expenditure is perfectly simple. Generally speaking you can claim any expense which relates directly to deriving income. That’s the end of it.
If the IRD ever asks you to prove you spent the money, you need to be ready to do so. So it's always advisable to get some form of written acknowledgement, such as an invoice, to support your expenditure. It's a convenient way to provide proof to satisfy the IRD.
In our example, the house owner could probably get confirmation from the window cleaner or even from her neighbour, if needed. The trouble is they might not be around when the proof is requested.
Incidentally, if you are in business and are registered for GST then you do have to have a “Tax invoice” for any payment you make of $50 or more, to claim the GST.