Tax time is fast approaching in Australia, leaving many businesses asking, can I claim my digital marketing as a tax expense? The short answer is maybe, but with some limitations.
The Australian Tax Office (ATO) allows businesses to claim some marketing-related expenses each year under general expenses.
Keep reading to find out more about what your small business may be able to claim and how you may be able to claim 120% back on a new website build this financial year.
However, it is always recommended to consult a local business accountant to assist you with your business’s tax obligations. Accountants can help you maximise your tax return while still abiding by the Australian Tax Office regulations.
If you are looking for a business finance professional to help yo
While Localsearch can’t provide you with financial advice, we can help you with a free digital marketing quote. Contact us today to get in before tax time.
Digital Marketing & Tax Frequently Asked Questions
What marketing can small businesses claim on tax in 2022?*
In short, yes, your business may be able to claim some marketing related expenses on tax.
If you run ads on social media, build a website, advertise your business in your local directory or even sponsor a local sporting team, you may be able to claim some of the cost back at tax time.
According to the ATO, businesses may be able to claim marketing expenses under general business operating expenses.
Some marketing expenses which may be tax deductible include:
- Social media spend.
- Professional search engine optimisation (SEO) and Google Ads (SEM).
- Digital directory listing.
- Website costs.
- Traditional marketing initiatives, such as directory listings, newspaper, TV and radio.
Can I claim my website on tax?*
According to the ATO, small business owners may be able to claim costs associated with a website as deductions. This includes domain registration and hosting fees. Larger costs, such as new website builds, may be able to be depreciated over the course of a few years.
But wait, as part of the Federal Budget handed down in March 2022, small-to-medium businesses may be able to claim a 120% tax rebate for a new website. However, businesses must meet a strict criterion to be eligible.
Who can claim the Federal Government’s 120% tax rebate (Small Business Technology Investment Boost) on a new website?
Many small-to-medium businesses are likely to be able to claim the Federal Government’s 120% tax rebate on new technologies, including a website. This means businesses can invest in a new website and claim 120% of the costs as a deduction at tax time.
For example, if you were to spend $10,000 on a new website, you’ll likely see a $12,000 tax deduction. But what are the eligibility requirements?
In order to be eligible businesses must:
- Have an aggregated annual turnover of less than $50 million.
How much can businesses claim on Small Business Technology Investment Boost rebate?
Businesses that are eligible for the Small Business Technology Investment Boost can claim up to $100,000 against the 120% technology rebate.
What can small businesses claim on tax in 2022?*
Depending on the type of business you run (home-based, sole trader, small-to-medium enterprise, etc.) what you can claim may differ slightly.
As a general rule, the Australia Tax Office recommends asking yourself these three questions when figuring out what to claim:
- Is the expense for your business, not private use?
- If your expense is a mix of business and personal, what percentage of use is for business purposes (this will be the % of the expense you can claim)?
- Do you have records to prove it?
5 Expenses Your Small Business May Be Able to Claim on Tax
1. Marketing activities — including websites.
As mentioned above, as a small business you may in fact be able to claim some operating expenses including marketing, public relations and even your website. For more information specific to your situation, chat to your local business accountant.
Remember, if you’re looking for a free digital marketing quote, you can reach out to the Localsearch team on 1300 360 867 or by submitting a form on our contact page.
2. Accounting and taxation services.
Getting a professional accountant to handle your tax return is always recommended to ensure your get the maximum return you’re legally entitled to. But did you know your visit to the accountant is actually a tax deduction? Taxation services are a simple and necessary deduction for a small business.
3. Travel expenses.
If you have travelled to attend an industry event, conference or even a client meeting, you may be able to claim it as a tax deduction. It is important to note the ATO does require the travel to directly relate to producing assessable income for your small business — so they’ll know if you try to claim the annual family holiday.
Expenses your business may be able to claim include:
- Transport, including airfares and taxis.
- Car hire and associated costs.
- Accommodation and meals.
- Business vehicle.
If your small business has a car, you may be able to claim some of your car-related expenses on tax. This includes, but is not limited to, fuel, servicing, insurance and registration.
4. Employees and related expenses.
Employee-related expenses may be tax deductible for your business if the ATO deems them ‘reasonable’ or ‘necessary’. This may include expenses such salaries, education, super contributions and more.
It is important to note, how and what you claim around employee-related expenses is determined largely by the type of business you operate.
5. Repairs and maintenance.
You may be able to claim repairs and maintenance for your small business on tax — but before you go putting in a pool and a rooftop entertainment area, take a closer look at the requirements. According to the ATO, businesses may be able to claim general repairs such as painting, plumbing maintenance, replacing broken fixtures and more.
*The information provided in this article is general information and should not replace professional advice. Always consult a professional before undertaking any of the suggestions in this article.