It’s tax time again, and for many businesses that means one last chance to make any tax deductible purchases before the financial year comes to a close.
Whether you head a large company or spend time on the road as a sole trader, here are 10 travel-related expenses that you may be able to claim this financial year – often for things you’d still pay for later – to slash thousands of dollars from your end-of-year tax bill.
1. Buy Qantas, Virgin Australia flight vouchers
Planning to travel with Qantas or Virgin Australia over the coming year? Then consider pre-paying for that travel this financial year by purchasing airline ‘gift vouchers’ for your business – but instead of giving them as a gift, you’ll simply keep them on-hand for any upcoming business-related travel.
This also side-steps Qantas’ usual credit card fees of up to $30 per passenger, per booking, while with Virgin Australia you’ll pay a one-off processing fee of $2.75 per voucher (maximum value of $5,000 each) with no credit card fee, and vouchers can be used again and again until depleted.
Just note that only one voucher can be used per booking with either airline and that Virgin Australia doesn’t accept American Express or Diners Club for voucher purchases, while Qantas does.
2. Take out or renew airport lounge memberships
It’s a deduction frequently utilised by companies whose employees must travel in economy, as road warriors can remain connected, refreshed and productive at the airport before their flights, with access to many of the same lounges as Gold frequent flyers regardless of how much they travel.
Further savings can often be had by purchasing membership for multiple years and for companies paying for or renewing 10 or more memberships at the same time.
3. Buy frequent flyer/frequent guest points
A topic oft-covered by Australian Business Traveller, buying airline frequent flyer points or miles can help you save on business class and first class travel, while purchasing frequent guest points with hotel chains can achieve similar results at high-end hotels.
Being tax time, you can splurge on miles before June 30 and redeem them for flights or hotel nights into the new tax year, but take note of any caveats that may apply before making your purchase.
The best time to buy is when miles are on the blocks at a discount or with substantial bonuses, both of which American Airlines is currently offering – and those miles can be used for flights with Qantas, British Airways, Cathay Pacific and more.
4. Buy annual, multi-trip travel insurance policies
Businesses who currently pay for travel insurance on a per-trip basis could save a substantial amount by purchasing a multi-trip annual policy for each corporate high flyer.
What’s more, you’d pay for the policy up-front, shifting that deductible outlay to the current financial year – but be mindful that single trip policies may remain the most economical choice for employees who take relatively few trips each year.
5. Organise your travel visas now
While many countries welcome business travellers under the Visa Waiver Program, China, Sri Lanka, Brazil and many others still demand pre-arranged visas which can be costly, especially so if your staff travel in a group.
6. Invest in new laptop bags, luggage
This move is more applicable to sole traders unless your company is particularly generous – now’s the time to buy that new briefcase or laptop bag you’ve been eyeing off, or even a new cabin bag or suitcase.
That’s because the Australian Government’s <$20,000 instant asset write-off allows you to immediately depreciate the full cost of material purchases in the current financial year, rather than doing so over a number of years.
Of course, speak with your accountant or tax professional to confirm your eligibility.
7. Buy new headphones, tablets, laptops
Using the same <$20,000 threshold, now could also be the perfect time to buy a new tablet or laptop for use on the road – whether you’re a sole trader buying for yourself or a company providing these for staff.
You might even be able to deduct noise-cancelling headphones if used in a business capacity – such as for participating in videoconferences or watching (and listening to) recorded presentations, but again, it’s best to defer to your accountant.
(Businesses not registered for GST could save even more if that purchase is over $300 from a single retailer and you claim back the GST component via Australia’s Tourist Refund Scheme (TRS) service, as opposed to claiming an input-tax credit as can be done by GST-registered businesses.)
AusBT review: Bose QuietComfort 35 noise-cancelling headphones
8. Purchase inflight Internet access in advance
Inflight Internet is increasingly becoming a must-have for business travellers, with many airlines allowing you to pre-pay for access before you leave the ground – often weeks or even months before your flight.
Pre-paid passes are often priced much lower than what you’d pay aboard. American Airlines, for instance, sells all-day passes online for use on US domestic flights for US$16, compared to US$33.95 aboard or US$43.95 to cover multiple same-day flights.
9. Pre-pay airport parking, airport transfers
If you know you have business trips coming up and usually drive and park at the airport or catch public transport to and from, pre-paying for these expenses is another quick and easy way to boost your deductions this financial year.
Many major airports including Sydney, Melbourne and Brisbane allow travellers to pre-pay for their parking online, while companies like Melbourne’s SkyBus sell tickets up to six months in advance.
10. Order some new business cards
Sure, ordering new business cards is probably the least exciting deduction you could make, but tax time is a good chance to replenish your supply, and even to consider destination-themed cards.
For instance, frequent visitors to Japan might order new dual-sided cards for use exclusively on these trips, with one side printed in English and the other side professionally translated into Japanese.
This article is not published or intended as personal financial advice. Speak to your accountant or tax agent for professional advice concerning your particular circumstances.
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