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Re: Claiming home cleaning as business

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Newbie Registered Tax Practitioner

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Replies 5

Hi,

My client has an excavation company. He has paid for "home cleaning services". Do we claim back the GST for this

and a tax deduction on his BAS and EOY business return?

When I seeked his accountants advice he said "claim only a portion". When I asked him how much GST to claim - he

suggested that I ask the client?  So Im back to square one.

I wouldn't think an outside trade business not using the home office very much can claim a full deduction with full GST claim?

Thanks Sally.

 

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Enthusiast

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Hi Sally,

 

If your client has a home office to run his business you will need to find a portion to be able to claim shared expenses.

 

So if the cleaner cleans the whole house you will need to apply a percentage to that invoice. for example:

 

Total house space: 350m squared

Office space: 15m squared

Calc: 15/350

Business %: 4.2%

 

If the cleaner is registered for GST you can claim 4.2% of that GST.

 

For example:

 

Invoice:$100

GST: $10

 

$100 x 4.2% = $4.20 deduction

$10 x 4.2% = $0.42 GST credit

 

More information can be found here

 

Alsp make sure that the company has paid for it and that it's his only business address. If this is not the only location where he runs his business you will need to do some more reaserch on home office expenses.

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

 

 

 

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Superuser Registered Tax Practitioner

Replies 2

Hi Sally2017

 

You need to speak to his accountant to find out what is a reasonable portion. Then if the service provider was registered for GST, you can claim GST only on that portion.

 

One Stop tax
Tax Return and Taxback Specialist
www.onestoptax.com.au

Newbie Registered Tax Practitioner

Replies 1

Ive already asked the accountant. He said "only a portion".

When I asked how much GST, he said to ask the client?  Thats not helpful. Thats why Im asking here.

I dont understand that. In my experience (as a BAS Agent) all clients think they

can claim everything with GST so of course its not correct to ask the client what they think.

Superuser Registered Tax Practitioner

Replies 0

Discuss with client and his accountant to see what portion is reasonable. And request a tax invoice to see if GST has been charged.

 

One Stop tax
Tax Return and Taxback Specialist
www.onestoptax.com.au

Highlighted

Best answer

Enthusiast

Replies 1

Hi Sally,

 

If your client has a home office to run his business you will need to find a portion to be able to claim shared expenses.

 

So if the cleaner cleans the whole house you will need to apply a percentage to that invoice. for example:

 

Total house space: 350m squared

Office space: 15m squared

Calc: 15/350

Business %: 4.2%

 

If the cleaner is registered for GST you can claim 4.2% of that GST.

 

For example:

 

Invoice:$100

GST: $10

 

$100 x 4.2% = $4.20 deduction

$10 x 4.2% = $0.42 GST credit

 

More information can be found here

 

Alsp make sure that the company has paid for it and that it's his only business address. If this is not the only location where he runs his business you will need to do some more reaserch on home office expenses.

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

 

 

 

Newbie Registered Tax Practitioner

Replies 0

Thank you so much Mike. You are very helpful!  I couldnt seem to receive a clear enough

answer but I will ask those questions back to the client first as the accountant was too vague.

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