If you own a tradie business, you probably know all about expenses. But if you’re just starting out, there might be a few things that could catch you out when claiming business expenses. Better to be safe than sorry, so we’ve put some common tradie business expense claims below.
A lot of self-employed tradies put in expense claims for every kilometre they drive in their trucks. But this trips many of them up because you can’t actually claim for any travel or mileage that is considered personal. You can claim for ferrying materials in your truck between job sites, but you can’t claim for dropping the kids off at school on the way to work.
For your vehicle, you have two options when it comes to claiming expenses:
Mileage claim – keep a logbook to track all business use. At the end of the year, you can claim the mileage at 79c per kilometre for the first 14,000 kilometres.
Claim actual costs – keep track of all running costs, including petrol, Warrant of Fitness, maintenance, insurance and registration. You’ll need to keep a logbook for 3 months to determine the business use vs private use.
And don’t forget that you can’t claim parking tickets or speeding fines!
Again, a few tradies go hundy on claiming expenses for every piece of clothing they buy. Sorry mate, those new Timberlands won’t count unless they’ve got steel caps and are purpose-built for the job.
If you want to claim for clothes that you wear to work, they need to advertise your business in some way, be necessary gear for protection, or any clothing that’s required for health and safety purposes.
Basically, if you have to wear it to do your job safely, you can claim for it.
Everyone loves this one, but be careful how liberal you get, as there are some conditions. For most entertainment expenses you can only claim 50% of the total cost, so don’t go overboard.
You can claim 100% of some entertainment expenses if they’re entirely business related, such as meals you buy while travelling on business, or food and drink provided at a conference that lasts at least 4 hours.
There are quite a few specific conditions for 100% deductible entertainment expenses though so it pays to chat to a numbers professional.
Make sure you keep records of everything because all receipts, including those for items under $50.00, need to be kept for seven years. A good way to keep track is to take a photo of your receipts and store them in the cloud somewhere.
If you’ve got any questions about your expenses, we’ve got mates over at Haven Accounting who can help you out, so just let us know!