The first 7 days of the recent weather event throughout South-East Queensland saw over 15,000 homes affected by flooding, which has sadly greatly increased as the weather cell continued to move south through New South Wales. QLD and NSW residents have experienced considerable losses of homes, cars, and personal items, with tax records among these many personal items that may have been irretrievably damaged due to the flooding.
If you have been affected by the recent floods and have lost previous or current financial records, we encourage you to please get in contact with your team at Walshs as soon as possible so we can advise the ATO on your behalf, and assist in the reconstruction of your financial data. We can do this by using information provided to Walshs historically by you which we have stored on your client records; by contacting third parties on your behalf; or by reconstructing information through the use of a statutory declaration. The ATO adopts a sympathetic approach in the case of natural disasters and will work with Walshs to assist you.
As a guide, the ATO will:
- Give you extra time to pay or lodge various tax forms
- Set up a payment plan to suit your particular cash flow
- Remit penalties or interest charged during the time you have been affected
- Prioritise any refunds owed to you
Record Keeping for Individuals and Businesses
Records are normally required to be retained for 5 years from the date on which the record was prepared or obtained, or from the date the relevant transaction or act was completed, whichever is the latter. While this time period is stated by the ATO, the period in which the ATO can review an income tax return is generally 2 years for individuals and small businesses, and 4 years for other taxpayers. This is from the day the ATO issues the Notice of Assessment for the relevant income tax return. For Business Activity Statements (BAS), the review period is normally 4 years from the date the BAS return is lodged.
Our standard practice is to contact the ATO and advise that a client has lost tax records as a result of a natural disaster, so this is noted in their records. Where possible, we will ask you to advise us on what income years your records have been destroyed. In the absence of being able to reconstruct historical records, the ATO are able to look at past trends for prior year(s) income tax information as a guide, as well as third party information that it receives as part of is normal data collection and matching process.
Self-Managed Super Funds
SMSF trustees are responsible for maintaining certain records pertaining to their SMSF. The ATO retention period is generally a minimum of 5 years, but there are some specific time frames for certain documentation:
- Trust deed and member application forms (life of the Fund)
- Copies of trustee minutes and changes of trustees (10 years)
- Copies of all reports given to members (10 years)
- Accounting records (5 years)
- Operating statement and statement of financial position (5 years)
If you are concerned about loss of documents due to the recent flooding disaster, please ensure you get in contact with our SMSF team so we can assist you further. The ATO will consider extensions for SMSF lodgement obligations to allow time to reconstruct your data.
The ATO form “Reasonable Estimate for Documents Destroyed by Disaster” can be lodged when your 2021 or 2022 income tax return/s are lodged. Walshs can assist you in this process once you have notified us of your circumstances.
Should you require advice or support from your advisor please contact our offices on 3221 5677, or by email. We hope that you and your families remain safe and well through the current turbulent weather.