The ATO can help with lost records due to a natural disaster
The ATO says it can help if you have lost your records due to a natural disaster such as a bushfire. It says it can achieve this by providing on-site visits to help you reconstruct your lost or destroyed tax records and/or assistance to work out reasonable estimates if your records cannot be reconstructed.
The ATO may be able to provide copies of information it already has, such as records of your tax returns, notices of assessment and payment summaries or income statements. It can also speak with third parties if appropriate.
Your accountant can work with the ATO to reconstruct on your behalf
If you wish your accountant to help reconstruct your records or make reasonable estimates, the ATO will ask your accountant to follow a similar process to its own. To reconstruct records, the ATO:
- asks for information from employers if required (for example, PAYG payment summaries or income statements)
- uses information from bank accounts, with client cooperation, where income was regularly deposited
- considers contributions made to super funds
When to make a reasonable estimate
For individuals
If your records cannot be reconstructed, the ATO says it will accept a reasonable estimate.
It points out however that each client will be required to provide a signed letter declaring the estimate is true and correct. The ATO has already provided a “reasonable estimate pro-forma” that you can help you to complete.
For businesses
Additionally, for you if you are a business owner, the ATO says it can help by providing records:
- activity statements and tax returns, if lodged
- Pay as you go (withholding) annual reports if lodged by employers
If you want your accountant to reconstruct records on your behalf
The ATO also asks that you follow a similar process to its own.
To reconstruct records, the ATO:
- uses bank and other third party information, including information from suppliers
- uses activity statements that have already been lodged, along with information from the affected business or individual to reconstruct their tax returns
- Considers all information it has already received to work out a trend-based average. The ATO says its preference is for this to be over three years, and for this average to include:
- tax statistics
- other external industry norms and factors in economic events
When to make a reasonable estimate – for businesses
If your client’s records cannot be reconstructed, the ATO says it will generally accept a reasonable estimate. But again, you will need to work with your accountant to provide a signed letter declaring the estimate is true and correct. The pro-forma document linked to above can also be used.
Ask the ATO for help if you need to
If you or your accountant need information about providing documents and you are a disaster affected, help is at hand with the ATO’s “Natural disaster assistance for registered agents” helpline on 1800 700 724.
Note: This information is from the following link: Reconstructing tax records after a natural disaster https://taxandsupernewsroom.com.au/reconstructing-tax-records-after-a-natural-disaster/