• Expenses you can claim in the year you incur them

    Working or operating expenses you incur in the everyday running of your business – such as office stationery, renting office premises, and salaries or wages – are called revenue expenses.

    You can generally claim a deduction for most revenue expenses in the same income year you incur them, including:

    • advertising and sponsorship costs
    • bad debts
    • bank fees and charges
    • business motor vehicle expenses (see Motor vehicle expenses)
    • business travel expenses (see Business travel expenses)
    • clothing expenses (corporate wardrobes and uniforms, and occupation-specific and protective clothing)
    • depreciating assets that cost less than $1,000 if you are a small business (between 1 July 2012 and 31 December 2013, the threshold was $6,500) (see Depreciating assets)
    • education, technical or professional qualification expenses
    • electricity expenses
    • fringe benefits – the cost of any fringe benefit provided and the fringe benefits tax on the benefit
    • home office expenses when your home is used as a business premises (see Running your business from home)
    • insurance premiums, including accident or disability, fire, burglary, professional indemnity, public risk, motor vehicle loss of profits insurance, or workers’ compensation
    • interest on money borrowed for income tax obligations, employer super contributions, or late payment or lodgment of tax – or to produce assessable income or purchase income-producing assets
    • land tax on business premises
    • legal expenses, such as those incurred defending future earnings, borrowing money, discharging a mortgage or obtaining tax advice
    • losses from a previous year (see Claiming tax losses)
    • luxury car lease expenses
    • stationery expenses
    • costs for running a commercial website, such as site maintenance, content updates and internet service provider fees
    • parking fees
    • public relations expenses
    • phone expenses
    • rates on business premises
    • registered tax agent and accountant fees
    • renting or leasing a business premises
    • repairing and maintaining income-producing property (see Repairs, maintenance and replacement expenses)
    • salaries, wages, bonuses or allowances (see Salary, wages and super)
    • small-value items costing $100 or less
    • subscription costs for business or professional journals, information services, newspapers and magazines
    • costs for sunglasses, sunhats and sunscreen when your business activities require outdoor work
    • super contributions for employees, and some contractors paid primarily for their labour (see Salary, wages and super)
    • tax-related expenses, such as:
      • having a bookkeeper prepare your business records
      • preparing and lodging tax returns and business activity statements
      • objecting to or appealing against your assessment
      • attending an ATO audit
      • obtaining tax advice about your business
       
    • tender costs, even if the tender is unsuccessful
    • trading stock, including delivery charges
    • transport and freight expenses
    • travel expenses for relocating employees
    • union dues and periodical subscription fees to trade, business or professional associations
    • water expenses on business premises.
    Last modified: 13 Mar 2015QC 33867