Your business spends a lot of money on telephone calls, mobile phones and other business communication tools. This is why you need to keep track of your spending, especially for when tax time comes. Herein we consider how to ensure you aren’t paying too much tax by missing savings on communications.
Depreciating Assets
Some of your communications costs will come under the tax bracket of depreciating assets because they will be expenses made for technology that lasts. A mobile phone, for example, will be expected to last for longer than just a year, so if you are buying these for your employees then you will not be able to claim the full amount on taxes in the first year. What you can do is claim for a portion of these expenses each year for the lifespan that they are deemed to hold. A list of depreciating assets and their lifespans can be found easily by contacting the Australian Tax Office.
Communication Costs
The actual costs for communication from your business can be claimed against your taxes. This means that all of the communications from your phone systems and mobile phones that you have represent a cost that can be claimed. All of the calls from these devices and the cost of Internet providers can be claimed against taxes because they are considered essential elements of running your business venture. You will need to collect all records of communications costs from your business so that you can claim for these at the end of the tax year.
Collecting Personal Communications Records
Some businesses choose to allow staff to claim the cost from their personal mobile contracts back from the business. If you choose to implement this procedure, your employees will need to calculate which costs were business related and which were personal calls as personal calls cannot then be claimed back on taxes. When employees submit claims, the best way to manage the process is by asking for copies of their phone usage records. This will enable you to demonstrate which of these calls took place for the purposes of business and will prevent any awkward moments when the ATO asks you to prove your claims about communication expenses.
Bookkeeping and Accountancy
When running a business it is important to use bookkeeping services to ensure that you have all of these records in order. It is sensible to enlist the services of a professional accountant to ensure that you have the in depth knowledge that is needed to ensure that you have not been claiming too much. Making a false claim is a very serious problem that can leave you with a large bill in the future and potentially even put you at risk of prosecution.
