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How to Reduce Tax for Tradies

Silver Peacock is an accounting and tax firm employing accountants, chartered tax advisors and financial planners that specialise in particular industries. By doing so, we are able to offer a more specialised and expert service to our clients.

Silver Peacock believes in the modo that your success is your success, therefore, the aim of Silver Peacock accountants and tax specialists is save you as much money as you can so you can put it into good uses weather its reinvesting into your business as it grows to expand or other healthy investments to provide you with a healthy return on investment (ROI).

The first question to ask yourself, are you getting the maximum return you are eligible for? To be able to answer this question, you should become familiar with some of the common deductions that you may be eligible for as a tradie!

These may include the following but not limited to:

  • Instant asset write-off
    If you purchased a car, ute or another large work equipment such as machinery regardless weather it was brand new or used, you will be eligible for an instant write off as long as the asset cost is less than the threshold.
    This initiative has been extended to 30 June 2020 and businesses with a turnover of $50 Million dollars can now access this concession. Silver Peacock accountants & tax specialists encourage you to take advantage of this concession while it’s still valid. If you have any questions about this, contact Silver Peacock. 
    The maximum amount is $30K depending on when the asset was purchased. Below is a table to provide you with a guidance:
Date rangeThreshold for each asset
7:30pm (AEDT) 02/04/2019 to 30/06/2020$30,000
29/01/2019 to before 7.30pm (AEDT) 02/04/2019$25,000
7.30pm (AEST) 12/05/2015 to 28/01/2019$20,000
  • Car Expenses
    Claiming car expenses is not as straightforward calculation, simply because there are several options and methods that are available to a business when working out this expense. Silver Peacock advises you to get this right since it’s almost always the focus of the ATO, particularly for the trades industries.

Some of these methods include the one-third of actual expenses and the 12% of orginal value method, however, these methods no longer apply to any purchases after 1 July 2015.

After 1 July 2015, we can use Cents per Km and logbook method. The first method uses a single rate of 66 cents per kilometre for all motor vehicles (regardless of the engine size) up to a maximum of 5,000 business kilometres per car. This rate increased to 68 cents per kilometre from 1 July 2018 (ie for the 2018-19 income year).

If a business wants to claim more than 5,000 business kilometres, the second method requires you to keep a logbook for a minimum continuous period of 12 weeks. This sets your business use percentage for 5 years. Odometer readings are needed and you can claim fuel costs based on the logbook records, or from actual receipts. All other car running costs will need written evidence.

Silver Peacock accountants and tax specialists will workout the best method to use for your business that will place you in the best tax position.

  • Electronics
    Since April 1, 2016, small businesses don’t incur fringe benefits tax when providing employees with multiple portable electronic devices.

Covering work-related laptops, tablets, calculators, GPS navigation receivers and mobile phones, this is a welcome provision recognising how crucial these devices are to businesses nowadays. However, its always best to contact your accountants and tax professionals at Silver Peacock when making a decision to supply your employees with benefit.

  • Business expenses
    Businesses can now deduct a range of expenses associated with starting a new business, such as professional, legal and accounting advice.

This is in addition to other general expenses that are tax deductible for tradies, which includes:

  1. Vehicle expenses in travelling between work sites (repairs, registration, insurance as well as petrol). In some circumstances, you may be able to claim the costs of trips between home and work if you carry bulky tools or equipment (eg an extension ladder)
  2. Accommodation and meal expenses if you are required to travel away from home overnight for work
  3. General work-related travel expenses including public transport
  4. Tools
  5. Work-related phone expenses
  6. Uniform and protective clothing/equipment, including sunglasses/protective eyewear/hi-vis clothing
  7. Laundry and dry cleaning of uniforms
  8. Insurance specific to your trade
  9. Union and association fees.
  10. Education costs (this depends on each person’s circumstances)
  11. Licensing fee, subscription fee

If you have any questions, please contact Silver Peacock & Co and talk to one of our accountants and tax specialists by calling us on 1800 983 448 or send us an emil to info@silverpeacock.com.au.

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