Claiming Business Expenses

We often get questions about what business expenses are tax deductible, such as motor vehicles and clothing.

Motor Vehicle Expenses

If you have a vehicle that is only used for business purposes, you can claim the full running costs as a business expense.

If you use your vehicle for both business and personal trips you will need to work out how to allocate costs correctly. Travelling from home to work is a personal trip.

There are 2 ways to do this – keeping a logbook or adding up the actual costs. The logbook option is to keep a logbook of all your travel for 3 months and we work out the percentage of business use, then this percentage can be used for 3 years.  No need to keep the logbook for longer than 3 months.  There are apps that do this too if you don’t want to write it down.

The rate per km at present is 82c if you want to claim a mileage rate. 

Clothing Expenses

Most jobs have some sort of dress code – whether you wear suits and heels or overalls and steel-toed boots. Work clothes can be a significant expense for any business owner or employee. You only buy these clothes for your job, so it feels as though they should be business expenses, right? Well, not quite.

What types of clothing can you claim as a business expense?

You can only claim clothing as a business expense if it’s specialist gear that isn’t suitable for private use, such as:

·        Uniforms

·        Protective clothing like overalls, goggles or steel toecap boots

·        Safety clothing such as high-vis vests

·        Distinctive work clothing that you wouldn’t wear anywhere else

What types of clothing can’t be claimed as a business expense?

Just because you don’t wear an item of clothing except outside work doesn’t mean you can claim it as a business expense.

Anything that you could reasonably wear in your everyday life cannot be claimed as a business expense. That includes clothes you buy specifically for work, like an expensive suit, that you wouldn’t otherwise have purchased. That even applies to items like football boots for your job as a football coach.

Not sure what to claim?

Give us a call or drop us an email – we can answer your questions about what’s claimable against your business.