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  • Using business stock for private purposes?

    13 September 2022

    If you take goods from your business for your private use, make sure you accurately record this in your stock on hand.

    Accessing your trading stock for private use is fine from a tax perspective, but you need to account for the stock correctly:

    • each time you use it (as you would if you sold it)
    • at year’s end.

    If you don’t adjust the actual cost of goods sold to reflect the goods you used for private consumption, you could be incorrectly claiming expenses you’re not entitled to.

    A good plan is to set up regular reconciliation processes to help you keep track of each time you take stock for private use. Keep a record which shows:

    • the date
    • a description of what was taken
    • the reason stock was taken
    • the cost or market value of the item (excluding GST).

    At the end of the financial year, any goods taken for your own use should not be accounted for as stock on hand.

    A registered tax professional can also help you understand how to correctly claim a deduction for cost of sales.

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