MAKING A CLAIM
Under income tax law, if you carry on a business, you can
generally claim a deduction for expenses you incur in carrying
on the business; however, there are some basic rules:
? you must have actually paid or committed to spending
the money
? the expense must be related to your business – you must
be able to show why you needed to spend the money to
carry on your business.
Common claims

There is no complete list of what you can claim because
what businesses do, and how they do it, varies. However, the
following is a list of common expenses you can generally claim:
■ advertising
■ bank fees and charges
■ business travel (away from home)
■ decline in value of depreciating assets (depreciation)
■ electricity
■ employee wages
■ the cost of any fringe benefits you provided, and fringe
benefits tax you incurred
■ hire or lease of plant and equipment
■ home office expenses
■ interest on borrowed money
■ motor vehicle expenses
■ phone expenses
■ registered tax agent fees
■ rent or lease of business premises (including home
business premises)
■ repairs
■ super contributions for employees
■ trading stock
■ transport and freight.
If you are not sure about what you can claim, check with us or
consult your tax adviser. If you make an ineligible claim, we may
amend your tax return and you may have to pay more tax.

THINGS YOU CANNOT CLAIM
You cannot claim:
■ private or domestic expenses – for example, food
or ordinary clothing. If the expense is part private and
part business, you can only claim a deduction for the
business part
■ capital expenses – these are the expenses you incur in
establishing, replacing, enlarging or improving a business
operation, as distinct from everyday working or operating
expenses. You can claim deductions for some capital expenses;
for example, machinery, tools or computers (see ‘Claiming
deductions for decline in value’ on page 30)
■ a deduction for GST if you can claim GST credits –
you claim GST credits separately on your activity statement
(see page 48)
■ the super guarantee charge – this is an amount you must
pay if you don’t contribute enough super for your employees
or if you contribute after the quarterly cut-off date
■ expenses you incur before you started your business –
you generally must have started business before you can
claim deductions but there are some exceptions and you can
– write off over five years, at 20% a year, some business
related capital expenses you incur before your business
starts operating; for example, the cost of feasibility studies
and legal expenses to establish your partnership, trust or
company
– claim the cost of licences and permits
– start claiming the decline in value (depreciation) of plant and
equipment as soon as it is installed ready for use