ATO Interpretative Decision
ATO ID 2001/805 (Withdrawn)
Income Tax
Retaining Cash-Register Z-Totals as Taxation Records on a Daily BasisFOI status: may be released
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This ATO ID is withdrawn as it restates the ATO view contained in Taxation Ruling TR 96/7.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is a taxpayer required to retain the 'Z Total' portion of a cash register roll in order to satisfy the record keeping obligations under section 262A of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
Yes. A taxpayer must retain the 'Z Total' portion of the cash register roll to satisfy the record keeping obligations under section 262A of the ITAA 1936.
Facts
The taxpayer uses a cash register tape to keep a record of daily business sales. At the end of each day, the taxpayer records by hand the cash sales onto a daily summary. The taxpayer retains the cash register roll for one month and then destroys it, including the 'Z Total'. This means that after one month, no original cash register records are retained. The only record of cash sales kept after a month are the hand written daily sales summaries which have been prepared by the taxpayer.
Reasons for Decision
Section 262A of the ITAA 1936 requires a person carrying on a business to keep records that record and explain all transactions related to that business, including any documents that are relevant for the purpose of ascertaining that person's income and expenditure.
In accordance with Taxation Ruling TR 96/7, it is considered essential that a taxpayer must keep source or primary records that can independently verify any summaries or secondary records prepared by the taxpayer. In respect of cash sales records from cash registers, the only independent source record is the cash register roll and the relevant 'Z total'.
The retaining of both the 'Z Totals' and the cash register rolls may be quite onerous given the bulk of the material. Therefore, in accordance with TR 96/7, taxpayers are regarded as having satisfied their record keeping obligations under section 262A of the ITAA 1936 if they retain only the 'Z total' portion of the cash register roll, provided that an appropriate sample period of both the cash register rolls and the 'Z-totals' is kept. This sample period should, in accordance with TR 96/7, be no less than one month after the end of the last period that the that the 'Z-totals' were reconciled with actual cash sales and bankings.
A taxpayer who prepares a hand written summary of 'Z-totals' without keeping the source records that can independently verify that summary is considered to have failed to satisfy the record keeping obligations under section 262A of the ITAA 1936.
Date of decision: 22 November 2001Year of income: Year ended 30 June 1999 Year ended 30 June 2000 Year ended 30 June 2001 Year ending 30 June 2002 Year ending 30 June 2003
Legislative References:
Income Tax Assessment Act 1936
section 262A
TR 96/7
Keywords
Recording media
Accounting & record keeping
Documentation & records
Accounting records
ISSN: 1445-2782
| Date: | Version: | |
| 22 November 2001 | Original statement | |
| You are here | 6 June 2008 | Archived |