What information should be on a receipt to make it an eligible business expense?

This week we were preparing records for a licenced home daycare.  During the process of setting up the daycare, the Owner purchased a number of items from yard sales.  This lead to a discussion in our office…..  If the yard sale seller provided a receipt for the payment what information would need to be present to make the expense deductible?

In a previous post we had provided a chart that clearly indicated the information required if you are charging GST / HST, but this was not relevant to this situation.  A call to CRA (Canada Revenue Agency) had the representative scratching his head for a moment.  After waiting on hold the representative came back with the publication, T4002 Business and Professional Income and under ‘Expense Records’ it stated the following:

Expense records

Always get receipts or other vouchers when you buy something for your business. When you buy merchandise or services, the receipts have to show:

  • the date of the purchase;
  • the name and address of the seller or supplier;
  • the name and address of the buyer;
  • a full description of the goods or services; and
  • the vendor’s business number if they are a GST/HST registrant.

As spring approaches and we venture out to find the weekend deals, remember if you are planning to use the item in the business ask the seller for a receipt and ensure it contains this information.

I am Colleen from Security House Accounting Services.  Give us your books – Take back your life!

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