How to Account for Expenses Without Receipts: A Guide for UK SMEs
Almost every small business owner has been there. You are pulling together your figures for the year, you spot a payment in your bank account that was clearly for the business, and the receipt is nowhere to be found. So can you still claim it? And what does HMRC actually expect you to keep?
This guide explains how to account for expenses without supporting documents, where bank statements help and where they fall short, and the practical steps to take when a receipt has gone missing. It is written for UK SMEs, sole traders and owner managed companies.
Can you claim business expenses without a receipt?
The short answer is yes, in many cases you can. There is no rule that says an expense is automatically disallowed simply because the paper receipt is missing. What matters to HMRC is whether you can show that the cost was a genuine business expense, incurred wholly and exclusively for the purposes of the trade.
The longer answer is that the burden of proof sits with you, the taxpayer. If HMRC opens a compliance check and asks you to substantiate a claim, it is for you to demonstrate that the expense was real and business related. A receipt is the cleanest way to do that. Without one, you need to build the best alternative picture you can.
Why a bank statement alone is not enough
This is the point that catches most business owners out. A bank statement or card statement is useful supporting evidence, but on its own it is rarely sufficient.
The reason is simple. A bank entry proves that money left your account and went to a named payee on a particular date. It does not prove what you bought, or that the purchase was for the business rather than personal use. Two payments of the same amount to the same supermarket might be a client lunch or the family weekly shop, and the bank line cannot tell them apart.
This was tested directly in the case of Mediability Ltd v HMRC (2023), where the tribunal disallowed expenses even though there were clearly matching bank transactions, because the underlying receipts were missing and the bank records did not prove the nature of the spending. The lesson is that a matching bank entry is a helpful start, not a complete answer.
What HMRC accepts as alternative evidence
If the original receipt is gone, the goal is to gather as much corroborating detail as possible. The more of the following you can assemble, the stronger your position:
A duplicate from the supplier. Many retailers and service providers can reissue an invoice or receipt on request. This is always the best first step.
An email or order confirmation. Online purchases almost always generate a confirmation email that shows the items, the price and the date.
The bank or card statement. This links the payment to a payee and a date and supports the other evidence, even though it cannot stand alone.
A delivery note or contract. Anything that shows what was supplied and on what terms.
A contemporaneous note. A short written record made at or near the time of the purchase, setting out the amount, the supplier and the business reason. HMRC specifically suggests making a note as soon as you can where a receipt is not available.
A practical way to bring this together is a missing receipt declaration. This is a simple internal document that records the expense, explains why the receipt is unavailable, sets out the business purpose, and is signed and dated. It does not carry the same weight as a receipt, but it shows reasonable care and a clear audit trail. You can download a ready made template below.
The test that really matters
Whatever evidence you hold, the underlying question is always the same. Was the cost incurred wholly and exclusively for the business? If the answer is yes and you have a sensible record to support it, a missing receipt is usually a manageable problem rather than a disaster. If the business purpose is genuinely unclear, no amount of paperwork will turn a personal cost into an allowable one.
A word on materiality and risk
Not every missing receipt carries the same risk. A lost receipt for a few pounds of stationery is a very different matter from an undocumented claim for several thousand pounds. HMRC does not publish a fixed threshold below which receipts can be ignored, so there is no formal exemption for small amounts. In practice, the smaller and more routine the cost, the lower the likelihood of challenge, and the easier it is to justify with a contemporaneous note.
The right approach is to be proportionate. Account for genuine business costs, keep the best evidence you can, and accept that for a small immaterial amount the practical risk is low while the principle still holds. For larger sums, do not rely on a bank entry alone. Chase the duplicate.
What Making Tax Digital means from April 2026
Record keeping is becoming more structured, not less. Making Tax Digital for Income Tax begins from April 2026 for many sole traders and landlords, starting with those whose qualifying income is above the relevant threshold, with further businesses brought in from April 2027. Under these rules you will need to keep your records digitally using compatible software and report quarterly.
The good news is that going digital makes missing receipts far less likely. Photographing a receipt the moment you receive it, and storing it in your accounting software, means the document is captured before a paper slip can fade or disappear. Getting into this habit now is the single most effective way to avoid the problem altogether.
Practical steps when a receipt goes missing
Check your inboxes and apps first. Search your email, your supplier accounts and your bank app for a digital copy before assuming it is lost.
Ask the supplier for a duplicate. A quick message often produces a reissued invoice within minutes.
Capture the bank entry. Note the date, payee and amount from your statement.
Write a contemporaneous note. Record what was bought and the business reason while it is fresh in your memory.
Complete a missing receipt declaration. Bring the detail together in one signed document and store it with your records.
Tell your accountant. They can advise on the right treatment and flag anything that needs a stronger trail.
How to stop this happening again
Most receipt problems come down to habit, not intent. A few simple routines remove almost all of the risk:
Use a separate business bank account so personal and business spending never mix.
Snap and save every receipt at the point of purchase using your accounting app.
Reconcile monthly, matching recorded costs to bank debits while the detail is fresh.
Keep your records for the required retention period. Sole traders should keep records for at least five years after the 31 January Self Assessment deadline for the relevant tax year, and limited companies for at least six years from the end of the accounting period.
Frequently asked questions
Can I claim VAT back without a receipt? This is stricter. To reclaim VAT you generally need a valid VAT invoice. HMRC may accept alternative evidence at its discretion for smaller amounts, but the rules are tighter than for income tax or corporation tax expenses, so chase the VAT invoice wherever possible.
Will HMRC accept a bank statement as proof of an expense? As supporting evidence, yes. As standalone proof, usually not, because it does not show what was purchased or the business purpose. Pair it with other evidence.
What happens if I cannot prove an expense? HMRC can disallow the claim, which increases the tax due, and may add interest and penalties if it considers reasonable care was not taken. Keeping good records is the simplest protection.
Is there a minimum amount below which I do not need a receipt? No. There is no formal exemption for small amounts, although the practical risk on minor routine costs is lower. The safest approach is to make a note at the time for any expense you cannot evidence with a receipt.
Free downloads
To help you stay on top of this, we have prepared two simple resources you can use straight away:
Missing Receipt Declaration template. A clear, signable form to record an expense when the receipt is unavailable.
Expense Record Keeping Checklist. A one page checklist of the habits that keep your records compliant and audit ready.
How Kubed Solutions can help
Kubed Solutions is an ICAEW chartered accountancy practice that specialises in food, drink and FMCG businesses. We help owner managed businesses keep clean, compliant records, prepare for Making Tax Digital, and handle HMRC queries with confidence. If you would like a review of your record keeping or help with your year end accounts, please get in touch.
This article is general guidance for UK businesses and does not constitute specific tax or legal advice. Taxation matters are based on the laws of England and Wales and the position at the time of writing. Please seek advice tailored to your circumstances before acting.