[CoolAnt]

This might be a dumb question but I've been searching the internet and can't find a clear answer.

What is the proper tax procedure if you purchase a voucher (of redeemable dollar value) for business purposes and then buy things with that?

Example:

You purchase a $100 on a JB HI-FI gift card with your business money.

Now let's say you purchase $100 worth of phone chargers and car mounts with that card.

You now have $200 worth of expenses:
• A receipt for $100 for buying the gift card
And
• A receipt for $100 worth of purchases

So what do you do for declaring business expenses and what is stopping people from double dipping on expense claims when it comes to these cards?

My question extends to all cards including pre-paid Visa cards.

 

[subyuber]

I'm no accountant but in the case of an Uber driver a voucher isn't an expense required for you to earn your money so not claimable. The other items are a required expense so tou can claim.

In another business situation you could possibly say you bought a half dozen gift cards to give away to clients as a thank you for example and then double dip with the actual receipts. Very shifty... I wish I thought of that with my last business.

 

[SydneyUber Chick]

Think of it this way. The gift cards are like a savings account, just one where you can only use the money in one place. So you cant claim on your deposits to the bank of JB hi fi (purchase of gift cards) but can claim on any business related expenses you purchase with that money from that account (gift cards)

 

[CoolAnt]

Simple, you can't claim a gift card or prepaid visa card as an expense.

Best example is a prepaid fuel card. You can only claim on when its used. Not when value is added.

Thanks everyone, good answers. Very helpful.

 

[Nuber1982]

I have a Star card with Caltex which direct debit my nominated bank account for the prescribed amount each time it reaches low balance. I haven't been entering individual transactions into MYOB, but each direct debit or top up is automatically allocated to Fuel expenses via the bank reconciliation feature. Is this the same scenarios as a voucher or gift card?

 

[SydneyUber Chick]

I have a Star card with Caltex which direct debit my nominated bank account for the prescribed amount each time it reaches low balance. I haven't been entering individual transactions into MYOB, but each direct debit or top up is automatically allocated to Fuel expenses via the bank reconciliation feature. Is this the same scenarios as a voucher or gift card?

Its not like a gift card as you dont pre purchase the star card. It direct debits your bank account so theres only the one transaction (gift cards there is 2 - the purchase of the gift card itself and then the purchase of items you buy with the gift card)

Can your star card be used to purchase non business related items (eg cigarettes, food etc?) If so the you would have to break down the spending and claim only what was spent on business expenses (like with the gift cards) but if the star card can only be used to purchase car related items such as fuel, oil etc then the automatic allocation into fuel (or car) expenses is fine.

 

[Uberiser]

claiming both as expense would be double dipping !

purchasing a preloaded card counts as transferring money within your accounts and is not an expense per se

 

[WollyDriver]

As above, buying the gift card is simply moving the money from one account to another, there is not GST nor any claimable expense in this transaction (unless there is an additional fee for the card itself).
Buying the items is a claimable expense (if the items are 100% business use) the same is if you had paid by any other method (cash/credit card).
As for caltex starcard, again, you *should* be claiming the individual purchases (starcard should give you a transaction statement or similar to assist with this). However, unless you are purchasing your weekly groceries (non claimable expenses) from there, then you are unlikely to have an issue. The best way to "prove" this is legitimate is to look at your $ spent per (claimable) km's driven. If these work out to roughly the right ratio, you would probably be OK (unless the ATO decide to be ass wipes about it all), since it doesn't change the amount you can claim, but possibly when you can claim it only by a couple of weeks...

PS, I'm not a tax accountant.
PPS, if you really want to do the dodgy, don't spend any money at JB, just withdraw the cash, and enter a $100 purchase for JB for some batteries or other disposable items.... Do this as often as you want. However, if you get audited, you will get screwed ie, you can write whatever you want, it's whether you can pass an audit that counts...

 

[Riders Champion]

FYI

Need to keep your records/receipts for the last FIVE YEARS.

It used to be 7 years. Receipts can barely last a few months so taking photocopies, scans or photos of them is the way to go.

https://www.ato.gov.au/individuals/income-and-deductions/in-detail/keeping-your-tax-records/

 

[twpak]

On the ATO android app there is an option of uploading receipts. Safe to take photo upload there and discard receipts?

 

[Scotsman]

On the ATO android app there is an option of uploading receipts. Safe to take photo upload there and discard receipts?

What if ATO app got hacked or crashed?

Better to still keep the reciepts.

 

[twpak]

Better to still keep the reciepts.

Those receipts fade in a couple of months. Seeing how I already have a stack of them really need long term storage.