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Monthly tax tip:
If your business holds trading stock then the closing value at the end of the year must be recorded as an asset which does reduce the amount than can be claimed as a tax deduction. E.g. a new business buys $10,000 worth of stock throughout the year and holds a value of $2000 on the 30th of June which means the business will claim a total of $8,000 in stock deductions for that financial year. Trading stock can be valued at cost, replacement or selling price. The cost price valuation usually provides the highest tax deduction, so it is the most popular valuing method. However, for some, the other methods can be the best calculation for their situation. Trading stock deductions should also be reduced by private use. Some business owners may use their own stock for private use e.g. a café owner eating café food items each day whilst working or a cattle farmer that kills a beast for their own personal meat. The stock deductions should be reduced by the cost price of these items used personally. The ATO have provided set rates for hospitality business owners who use their own food for private use, to reduce paperwork (listed below). Please ensure you contact us about your stock deductions if you are unsure what is unable to be claimed at tax time.
| Type of business |
Amount (excluding gst) for adult/child over 16 years |
Amount (excluding gst) for child 4 to 16 years old |
| Bakery |
$1,360 |
$680 |
| Butcher |
$990 |
$495 |
| Restaurant/café (licensed) |
$4,830 |
$1,950 |
| Restaurant/café (unlicensed) |
$3,900 |
$1,950 |
| Caterer |
$4,120 |
$2,060 |
| Delicatessen |
$3,900 |
$1,950 |
| Fruiterer/greengrocer |
$1,010 |
$505 |
| Takeaway food shop |
$4,030 |
$2,015 |
| Mixed business (includes milk bar, general store and convenience store) |
$4,870 |
$2,435 |
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