What type of business expenses you can claim

If you are claiming business expenses you should apply these three rules to ensure you don’t make any mistakes.

  1. The expense must be for your business and not for private use.
  2. If the expense is a combination of business and private use, you can only claim the portion that is used for your business.
  3. You must have a record of the expense to prove it.

Some tips for claiming business expenses

  • When claiming business expenses you cannot claim private expenses such as private rent, fines, travel, food, or renovations of a private residence.
  • For expenses that are a combination of business and private use you can only claim the business portion.
  • When upgrading accounting software, check the business and private expense codes are correct.
  • When claiming business expenses, you can only claim the GST exclusive amount, if you are registered for GST, not the GST inclusive amount.
  • Ensure you have correct and accurate records to prove the business expenses.
  • Be aware that if your business is a company or trust, paying private expenses from company or trust accounts may cause other tax implications, such as fringe benefits tax and shareholder loans.

If you have any questions about claiming an expense for business please get in touch. You can also visit the ATO website for more information.