There are generally two main tests that all expenditures must meet in order for you to be able to deduct them for business purposes:
Was the expenditure made for the purpose of earning taxable income?
Was the expenditure reasonable in the circumstances?
If the expenditure was not made to earn taxable income, you will not be able to deduct the expense.
TAX TIP Fixed assets such as land, buildings, vehicles, machinery and equipment, computers, etc. are not fully deductible in the year you purchase them. These items will be recorded on your Balance Sheet as assets. For accounting and tax purposes, you can write […]