Business Expenses: What You Can and Can’t Claim.
Tax time can bring out the creative writer in all of us. At Breathe Accounting, we’ve seen it all and…
Tax time can bring out the creative writer in all of us. At Breathe Accounting, we’ve seen it all and…
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Let’s be real — tax time can bring out the creative writer in all of us.
At Breathe Accounting, we’ve seen everything from receipts for dog grooming (“He’s the office mascot!”) to jet skis allegedly used for “client entertainment.” We understand that the line between personal and business expenses can sometimes blur. And while we admire the entrepreneurial imagination, the Australian Taxation Office (ATO) doesn’t.
That’s why it’s essential to ensure your claims are legitimate, clearly justified, and proportioned appropriately — helping you avoid unnecessary ATO audits or penalties that can easily be sidestepped with the right advice.
As the end of the financial year approaches, many business owners find themselves asking the same familiar question: “So… what exactly can I claim?”
While it might be tempting to label that dinner out as a client meeting or justify the new pool table as your boardroom table, the ATO has clear rules — and unfortunately, creative accounting isn’t deductible.
To be eligible for a business deduction, the ATO requires that the expense is:
And if the expense is split between business and personal use — which is often the case with items like laptops, phones, or vehicles — you can only claim the portion that is reasonably connected to your business activities.
In short, an expense must be necessary for your business, genuinely incurred in the course of operating it, and supported by evidence.
One of the trickiest parts of claiming business expenses is knowing where to draw the line — especially when something is used for both business and personal purposes, as is often the case with laptops or mobile phones.
On this, the ATO is clear: only the business portion of a mixed-use expense is deductible.
For instance, if you are running a home-based business and you’re claiming occupancy costs (like rent or mortgage interest), you’ll typically need to calculate this based on the floor area used for business and the time it’s used.
Similarly, for running costs (electricity, internet, etc.), there are several calculation methods you can use depending on your setup.
For other shared-use items or services, the ATO expects claims to be made on a fair and reasonable basis — one that accurately reflects actual private vs. business use. For example:
Regardless of the method, make sure you retain accurate records that clearly demonstrate how you calculated the business use portion, as these can be required by the ATO.
As accountants, we don’t just crunch the numbers — we decode them, question them. We’re not afraid to ask the hard questions to ensure that everything you put in your tax claim is compliant with the latest regulations.
Our role is to guide you through these distinctions, ensuring that your claims are both maximised and compliant so that you can focus on running your business with confidence. We do this with your long-term success in mind — because staying compliant today means staying in business tomorrow.
At Breathe Accounting, we believe that transparency is the foundation of every strong client partnership. We’re not just here to lodge your return — we’re here to support your business with clear, practical advice that sets you up for long-term success.
We see ourselves as more than just accountants. We’re your financial partners — here to offer guidance, clarity, and peace of mind when it comes to your business finances.
Our goal is to:
We’ve worked with businesses of all shapes and sizes, and we’ve seen some creative claims. While we’ll always aim to help you maximise your deductions, our focus is always on making sure your deductions are strong, compliant, and backed by documentation.
No guesswork. No grey areas. Just thoughtful advice and smart, compliant strategies that help your business stay on track.
In short? You bring the questions and the receipts— we’ll bring the clarity and expertise to help you move forward with confidence.
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