Announcements
Are you a tax professional needing a bit more time to lodge? Check out how to apply online for a deferral, or ask the Community!

ATO Community

Re: Work Related Injury - Working Director not covered by Workers Comp

This post is archived and may not be up-to-date.

Newbie

Views 1095

Replies 2

I am looking for some further information about income tax/GST deductions on medical expenses incurred by a company. The situation was related to a single director company that does not have workers compensation insurance. The injury was sustained by the director who is a working director and performs all the work for this company (it is quite a physical role) and this injury occured during his normal work day. At this stage he doesn't take a wage and there are also no other employees within the business. 

In WA it is optional to cover a working director for workers compensation so could these injury related expenses be deductible/ GST creditable (if applicable) to the company? Or does this become a personal expense of the director? Can you point me in the right direction to do some further research on this?

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Community Moderator

Replies 0

Hi @TOMACCOUNT,

 

Expenses incurred by a company in respect of their employees or directors are deductible expenses.


This can include payment of director’s medical expenses .

 

If the benefits are private to the director and not work related, it can mean that the company may have to pay Fringe Benefits Tax . 

 

However, see 20.8 of the guide where it says that some benefits may be exempt from FBT.

 

“Compensable work-related trauma" Benefits provided for work-related injury are exempt benefits.

 

It must be a disease, injury or ailment that was related to their employment- A work related trauma, to pay the directors medical cost and not have to pay FBT.

 

The work related trauma exemption applies, when it would normally be covered by workers compensation.

 

KylieS

 

 

2 REPLIES 2

Community Moderator

Replies 1

Hi @TOMACCOUNT,

 

We will do some research on this one and get back to you.

 

KylieS

Most helpful response

Community Moderator

Replies 0

Hi @TOMACCOUNT,

 

Expenses incurred by a company in respect of their employees or directors are deductible expenses.


This can include payment of director’s medical expenses .

 

If the benefits are private to the director and not work related, it can mean that the company may have to pay Fringe Benefits Tax . 

 

However, see 20.8 of the guide where it says that some benefits may be exempt from FBT.

 

“Compensable work-related trauma" Benefits provided for work-related injury are exempt benefits.

 

It must be a disease, injury or ailment that was related to their employment- A work related trauma, to pay the directors medical cost and not have to pay FBT.

 

The work related trauma exemption applies, when it would normally be covered by workers compensation.

 

KylieS