Some creative business owners are brilliant at bringing ideas to life — but less brilliant at keeping hold of the paperwork that goes with it. Receipts get lost in pockets, screwed up in bags, or vanish into the ether the moment you buy something online.
So how risky is it really if you don’t have receipts for everything your business buys? Can you still claim the expense for tax? And what about reclaiming VAT?
Let’s unpack the rules (minus the panic).
For Tax Deductibility: The Law Doesn’t Say “No Receipt = No Deduction”
HMRC’s rule for claiming business expenses is simple:
The expense must be wholly and exclusively for the purpose of the trade.
There is no legal requirement to have a receipt specifically.
What you must have is evidence that the expense was:
- Incurred by the business
- For business purposes
- Not personal
So yes — you can still claim an allowable expense without a receipt if you have other credible evidence.
However… the risk lies in whether you can convincingly prove it if HMRC ever asks.
What HMRC Will Usually Accept as Alternative Evidence
If a receipt is missing, HMRC may accept:
- Bank statements or card transaction records
- Supplier statements
- Order confirmations or shipping notifications
- Email invoices or digital receipts retrieved from online accounts
- Screenshots or copies of invoices from a supplier portal
- Contracts or purchase orders that relate to the cost
The stronger and more complete the “paper trail,” the lower the risk.
A bare bank line saying “Amazon £42.99” with no idea what was purchased is weak.
A bank line plus an order confirmation showing it was a camera accessory you needed for shoots is strong.
When Missing Evidence Is Most Problematic (for Tax)
HMRC pay closer attention when:
- The item looks like it could be personal (meals, clothing, electronics)
- The business owner regularly claims items with no receipts
- The description on the bank feed is vague
- The amounts are unusually high or frequent
- You can’t explain what the item was for
If HMRC can’t be satisfied that a purchase was business-related, they can disallow the deduction.
For most small day-to-day creative business expenses, the risk is manageable if there is some other solid evidence.
VAT: This Is Where Missing Receipts Matters More
For VAT-registered businesses, the rules are stricter.
To reclaim VAT, you generally need a valid VAT invoice containing:
- Supplier’s name, address and VAT number
- Your business name
- Invoice date
- Description of goods/services
- VAT rate and amount
Without that, you technically cannot reclaim the VAT.
HMRC may allow a reclaim without a formal invoice, but only if:
- The amount is small (typically under £250 including VAT) — e.g., petrol, meals, low-value items
- You can provide alternative evidence (bank record, till slip, supplier statement)
- It is clear VAT was actually charged by a VAT-registered business
If you can’t prove VAT was charged, HMRC will refuse the reclaim — even if the expense is clearly business-related.
High-Risk VAT Items Without Receipts
You’re likely to lose the VAT reclaim if you have no invoice for:
- Software subscriptions where VAT status is unclear
- Services from overseas suppliers (different rules apply)
- Equipment purchases
- Anything where the supplier name doesn’t obviously match the nature of the item
Again, a bank transaction alone is not enough.
Practical Tips to Stay Safe (and Sane)
1. Go digital wherever possible
Ask suppliers to email invoices.
Connect apps like Dext, Hubdoc or AutoEntry to sweep receipts directly into your accounting software.
2. Rescue what you can
Most online retailers keep downloadable invoices (Amazon, Apple, Adobe, etc.).
3. Add notes
If you lose a receipt, write a short note in Xero/FreeAgent explaining:
- What it was
- Why it was business-related
- Why the receipt is missing
This helps massively if questioned later.
4. Be consistent
A few missing receipts each year = normal.
Dozens = a red flag.
5. For VAT: prioritise retrieving proper invoices
If you’re VAT-registered, always try to obtain a formal VAT invoice.
It’s far more important than for corporation tax or income tax purposes.
So How Risky Is It Really?
For tax deductions:
Low to moderate risk, depending on how strong your alternative evidence is.
HMRC look for reasonableness, traceability and business purpose.
For VAT reclaim:
Higher risk, especially for larger purchases. Missing invoices can mean losing the VAT completely.
Final Thoughts
Creative business owners don’t need perfect filing cabinets or colour-coded receipt folders — but you do need enough evidence to defend your costs if HMRC come knocking.
When in doubt:
- Tax deduction? Alternative evidence is usually fine.
- VAT reclaim? Try to get the actual invoice — it really does matter.
If you want help tightening up your expense and receipt process (without drowning in admin), we can help you build a simple system that works for real-world creative businesses.
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