Before we go… I’ll have the steak, extra fries, hold the tax

Every Friday we just want to stop the world for a moment and give you a couple of real tips to think about that will make a real difference to your business and in your life.

Can you feel it?  Tax season is getting closer and closer and as we’ve often said, the key to victory is all in the planning.  If you’re planning on forking over less tax to the government going forward, you’ll need to have a handle on the rules that affect deductibles from the largest piece of capital (10-colour large format printer anyone?) all the way down to the humble cup of coffee.

Yes coffee – it’s deductible in many circumstances because it can be considered an integral part of a “coffee” meeting with a client or indeed part of a more expansive work day snack.

I can’t believe coffee’s tax deductible, tell me more!

Look, this is very exciting news, especially to those of us with a fiendish coffee addiction but again, you must consider the circumstances.  Lining up soy milk, cappuccinos at your favourite weekend breakfast spot while you peruse the sport pages does not conform to the spirit of the law.  Paying for the coffee and triple choc muffin a valued client orders during the course of your business meeting, does.  You are well within your rights to claim coffee as deduction if it is purchased and consumed in the furtherance of your business endeavours and yes, meetings with clients or fellow team mates when things simply need to get done, certainly qualify.

Here’s what else qualifies

Food.  Within reason and under the right circumstances.

Tip: do not head down to your local supermarket, do a weekly shop for yourself and try to claim that.  This will eventually lead to problems and a sweaty-palmed Q&A with the ATO.

Here are four circumstances under which you can confidently claim food:

1. While travelling interstate on business.  It can be within your state though, as long as you’re away overnight (easy done in WA with its 2.646million km2 ).  $100/day is a safe and fair figure so help yourself to that pub grub or reasonably priced two courser but reconsider the 9 course degustation with matching wines in the city
2. As part of a working lunch.  Again, the ATO understands that sometimes business imperatives demand we work through lunch or stay back past dinner time.  Within reason, you can claim that late night office pizza or lunchtime sandwich tray in the conference room.
3. Inhouse/onsite catering facilities like canteens, hired chefs may serve up deductions for the company.
4. Once again, those muffins and coffee that you paid for when you sat down with your visiting client – deductible.

The aim here is not simply to see how many deductions you can accrue.  That would mean you’re losing sight of the larger goal: to increase profit so that your business can positively impact your family life.  Make sure that there is a significant  return on investment in the form of efficiencies or profit before you start ringing up deductions.

Have a great weekend and if you’re away working for the next couple of days, don’t forget to keep your receipts.