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SMEowner(Newbie)Newbie
20 May 2025

Hello community,


I am planning the commencement of my new business and have incurred costs including a new phone, laptop and also training through an RTO that relates to the work I will be undertaking. All of these have been incurred in the past 3 months. I am still employed however that will cease in early July this year.


Am I able to claim these expenses now in the current financial year to offset my other income as an employee? Also, the expenses have been incurred in my sole name and it is likely that I will trade under a company - what are the implications with that?


thanks


SMEowner

1,351 views
5 replies
1,351 views
5 replies

Most helpful response

Most helpful reply

David-Nguyen(Dynamo)Dynamo
20 May 2025

In short:

No, you generally can't deduct these expenses in this financial year against your employment income, but you may be able to claim them once your business commences. The ATO is strict about when a business actually commences. Expenses incurred before your business starts trading are considered "pre-commencement" and are not deductible against your current employment income.


All replies

Most helpful reply

David-Nguyen(Dynamo)Dynamo
20 May 2025

In short:

No, you generally can't deduct these expenses in this financial year against your employment income, but you may be able to claim them once your business commences. The ATO is strict about when a business actually commences. Expenses incurred before your business starts trading are considered "pre-commencement" and are not deductible against your current employment income.


Liked by JenniferATO
SMEowner(Newbie)Newbie
20 May 2025

Thanks for your quick response. Do you foresee any problems with my claiming them under a company structure even they’ve been incurred under an individual?

David-Nguyen(Dynamo)Dynamo
20 May 2025

The company can only claim tax deductions for expenses that it has incurred. The company cannot claim those costs because expenses were incurred in your personal name.

One possible solution is reimburse yourself from the company (once it's established).

Or if you decide not to incorporate and start out as a sole trader, then you can claim those expenses yourself as part of your business deductions once the business begins.

Liked by JenniferATO
David-Nguyen(Dynamo)Dynamo
20 May 2025

@SMEowner

Yes. For the Phone and Laptop (Capital Assets), the company can use instant asset write-off (if still available under the current tax thresholds/rules), or depreciate over time using the simplified depreciation rules.

For the Training course, if the training directly relates to your business activities, the company may claim it as a deductible expense once it reimburses you. But it must be related to the income-producing activities of the business (not just personal upskilling).


Liked by JenniferATO and SMEowner

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