Coffee machines & tax deductions*
A question we often get asked: –
Can I claim my recently purchased business office coffee machine as a deduction against my business income?
Funnily enough, you can, but there are certain questions you need to consider before doing so.
- Ask yourself these four questions:
- Are you a business owner, or just an employee?
- What was the price of the newly purchased machine?
- Is your business registered for GST?
- Is the machine solely used for business purposes?
In reality, you will not be able to claim 100% of the expense of your corporate office coffee machine, unless the machine is not based in a home-based business site.
The steps in order to claim the machine are quite simple.
If you are registered for GST, you should deducted the machine as follows:
(Cost of the machine — The GST on the machine) x business consumption of the machine x The suitable depreciation rate.
This process is different if you are not registered for GST.
If you are not registered for GST, the cost of reduction is calculated as follows:
Cost of the machine x Business consumption of the machine x The suitable depreciation rate