Micro business owners cautioned against 'ceiling style' expense claims

Micro business owners preparing their own tax returns are being cautioned by the Australian Taxation Office (ATO) to claim only actual expenses and not maximum limits.

Assistant Taxation Commissioner, Kath Anderson

The ATO says it will be vigilant in reviewing business-related deductions to ensure claims are legitimate.

Assistant Taxation Commissioner, Kath Anderson (at right), said many taxpayers believe they can claim business related deductions as long as they stay within acceptable limits.

“Many taxpayers don’t have a good understanding of what deductions they can claim, and believe they can claim for items which they in fact can’t. Some taxpayers even think that you can make a standard claim of $300 without having spent the money,” she said.

While self-employed people have plenty on their plates at the end of the financial year, planning and documenting claims is vital.

Self education will be an area under scrutiny to ensure claims directly relate to the business owner's ability to earn income. Personal interest education and an increasing focus on 'wellness' programs area areas raising concern - and scrutiny.

Just because something is of personal interest to you doesn't mean it is directly related to your ability to earn income through your business.

Use of phone and internet

Claims for phone and internet use are also becoming more complicated as more and more people work from home, but the ATO advises it will only be honouring deduction claims for the portion of fees that is actually used for work.


Self-employed people should take care not to over-claim on meals bought at cafes or restaurants during things like pitching or client meetings.

While larger companies may reimburse staff for meetings and travel, the environment is more restrictive for people running their own businesses.

Self-employed super contributions

If you’re self-employed you may be able to claim a deduction for contributions made into super.

While the rules are changing on this from next financial year, for the 2017 financial year you cannot claim this if more than 10 per cen of your income for the year came from salary or wages.

You get get detailed information on this here.


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