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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?
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.
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
Business %: 4.2%
If the cleaner is registered for GST you can claim 4.2% of that GST.
$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.
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.