bnw Accountants Newsletter
The topic for this weeks column is claiming work-related clothing expenses. The ability to claim clothing falls under the following 4 headings:
1. Protective Clothing/Footwear
This is generally clothing/footwear that protects you or your own clothing from the risk of illness/injury at your workplace. Items under this banner include fire-resistant clothing, sun-protection clothing, fluorescent coloured clothing, non-slip shoes, steel-capped boots, rubber boots, gloves, overalls, aprons, heavy duty shirts and trousers (but not jeans), hard hats, safety glasses and ear-muffs.
2. Compulsory Uniforms
This is a set of clothing or a single item that your employer enforces you to wear, that identifies you as an employee of that business/organisation. There must be a strictly enforced policy by your employer making it compulsory for you to wear that clothing at work. Typically this uniform will carry the employers logo.
3. Occupation Specific Clothing
This is clothing which is specific to a particular occupation and easily recognised as such, for example a chefs checked pants, which are not for everyday use.
. Non-Compulsory Uniform
This is a uniform that is not compulsory to wear to work but has been registered with AusIndustry.
In order to claim the above it is essential that receipts and invoices are kept to provide proof of the expense.
Provided you have kept the appropriate documentation for the above expenses you are then able to also claim laundering of the above items. You do not need to keep written evidence of this claim if it is $150 or less
For more information on the above the Australian Taxation Office website (www.ato.gov.au) will provide you with information on this topic as well as any other queries you may have.
Deductions you can claim for your car.
This deduction can be claimed if you use your vehicle in your business and can also be claimed as a work related car expense. There are four methods you can use to claim your car expenses. The four methods are as follows:
• Cents per Kilometre
• 12% of original value
• 1/3 of actual expenses
• Logbook
The cents per kilometre is usually used for claims where the car has been driven 5000 kilometres or less during the financial year. You can still use this method if you have travelled more than 5000 kilometres although your deduction will be limited to 5000 kilometres. You are not required to provide substantiation documents for this method. The claim can be made on a reasonable estimate of kilometres travelled. You may need to be able to show how you have worked out your business kilometres.
The 12% of original value method is only available for use if the vehicle has travelled over 5000 kilometres for business purposes during the financial year. You do not need to keep a log book or odometer records although you may need to show how you worked out you travelled more than 5000 kilometres. In claiming this method you are able to claim 12% of the original cost of the car up to the luxury car limits for the year in question.
The 1/3 of actual expenses is also available if your vehicle has travelled more than 5000 kilometres for business purposes during the financial year. The deduction for this method will be 1/3 of all of your cars expenses (excluding capital costs) for the financial year. You will need to keep written evidence of all your car expenses to be able to use this method. There are special rules for fuel costs you can either keep fuel tax invoices or you can estimate fuel costs from you odometer records that show readings from the start and end of the year.
The last method is the logbook method which is based on the business use percentage of the vehicle. To use this method you must have kept a logbook for 12 weeks and it is the logbook from which your business percentage is worked out from. A logbook is valid for 5 years. You are required to keep written documentation of all your car expenses except for fuel as above you can estimate fuel costs from odometer records.
In choosing which method works for your business you are able to change the method you use from one year to another and you are able to use the method which will give your business the largest deduction. Once again you are advised to talk to your accountant before deciding on which method to use
