(19/08/2019) If you are a tradie and a small business owner, be certain about what you can claim on your tax return.  

To claim business expenses:

  • the money must have been spent for your business (not a private expense)
  • if it is for a mix of business and private use, only claim the portion that is related to your business
  • you must have a record to prove it.

You can generally claim a deduction for:

·         Protective clothing

  • protective clothing (for example, hi-vis vests and steel-capped boots)
  • costs for safety glasses, sunglasses, sunhats and sunscreen when your business activities require outdoor work.

·         Buying tools for work

  • You can claim a deduction for most costs you incur in running your business. This includes assets, which you can immediately write-off if they cost less than the relevant instant asset threshold.

·         Motor vehicle

  • As a small business, you will be able to claim motor vehicle expenses to the extent the vehicle is used in carrying on your business.

·         Buying assets for your small business

If you are a small business owner, You can claim a deduction for each asset first used or installed ready for use, up to the following thresholds:

  • $30,000, from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020
  • $25,000, from 29 January 2019 to 7.30pm (AEDT) on 2 April 2019
  • $20,000, before 29 January 2019.

You may purchase and claim a deduction for multiple assets provided each asset costs less than the relevant threshold.

You need to keep records that substantiate your business income and expenses.

Your records must:

  • explain all transactions
  • be in writing (electronic or paper)
  • be kept for five years (some records may need to be kept longer).

Depending on your tax obligations, you may also need to keep records for GST, fuel tax credits and records relating to your employees and contractors.

You can keep your business records electronically or on paper, but keeping electronic records makes some tasks easier.

Contact our office today for expert advice on getting the deduction right for your business.