GST records for online purchases, a plain guide for Australian sole traders

If you run a small business, a good share of what you buy for it now comes from online shops: cables, packaging, stationery, tools, software. Buying it takes a minute. The trouble starts months later, when you need to show what you bought, what it cost, and how much of that was GST.

This is a plain guide to the record-keeping side. It is general information and not tax advice. The rules belong to the ATO, so check ato.gov.au or your accountant for anything that turns on your own situation.

An order confirmation is not always a tax invoice

This is the point that catches people out. To claim a GST credit on a purchase of more than $82.50 including GST, you need a tax invoice, and a tax invoice is a specific thing. Broadly, it has to show that it is a tax invoice, who the seller is along with their ABN, the date, what you bought, and the GST included in the price.

An order confirmation email often has most of that. It does not always have all of it. So:

• From an Australian seller, the confirmation is frequently enough, or a proper tax invoice is a click away on the order page. Get into the habit of downloading it when you buy, not at tax time.
• From an overseas marketplace, you may have paid GST and still not hold anything that counts as a tax invoice. In that case you generally cannot claim the GST credit, even though the expense may still be deductible.

If you are not registered for GST at all, which is the case for many sole traders under the $75,000 turnover threshold, you do not claim GST credits. You claim the full GST-inclusive cost as a deduction instead, where it is deductible.

What to keep, and for how long

Keep the record for five years. For each business purchase you want to be able to show:

• what it was
• when you bought it
• who you bought it from
• what you paid, and how much of that was GST
• that it was for the business

The last point matters more than it looks. Most sole traders buy personal and business items from the same account, often in the same order. A single Amazon order with a box of mailers and a birthday present in it is completely normal. It also means the order total is the wrong number. You need to be able to pick out the business lines.

Where the time actually goes

Almost nobody struggles with the rules. They struggle with the job of reconstructing a quarter from memory: opening old emails one at a time, deciding which lines were for the business, typing amounts into a spreadsheet, and working out the GST. It is slow, it is dull, and it gets done badly because it gets done late.

The fix is to capture each purchase when it happens, so the quarter is already assembled when you need it.

How Almanac handles it

Almanac reads your order emails. You forward a confirmation to your personal address and it becomes rows in your budget, with the item names, prices, date and order number pulled out for you. That part is free.

The Business plan adds the tax side on top:

• Flag the business lines. Tick the items that were for the business and leave the birthday present alone, even when they arrived in the same order.
• A GST report by quarter, following the Australian financial year, with the GST worked out and a spreadsheet you can hand straight to your accountant.
• Client tags and bill-back. Tag an expense to a client and pull it into an invoice later, with your markup.
• Tax invoices of your own, numbered and printable to PDF.

Almanac keeps the record organised. It does not decide what is deductible, and it cannot turn an overseas order email into a valid tax invoice. What it removes is the quarterly scramble.

The Business plan is A$4.99 a month or A$39 a year, with a 14-day free trial. Your records stay yours if you stop: invoices and business details remain viewable, printable and downloadable on the free plan. The FAQ has the detail on pricing and cancelling.