Entertainment Expenses

Entertainment expenses when with clients or colleagues on business, like lunches and dinners, are generally 50% deductible.

We encourage you to code it to entertainment and at the end of the year we adjust for the non-deductible portion of larger bills.

Alternatively, split the payment in Xero coding 50% to entertainment and 50% to drawings.

We advise you to keep a diary detailing who was at the meeting and the business purpose.

If the food or drink is brought into your clinic, it is generally fully deductible.

Be careful with “working lunches”. These are not deductible, so do not get into the habit of claiming your daily lunch.

Clothing, eyewear, and footwear are very seldom deductible unless they are specific and peculiar to your work.

There are several cases involving taxpayers claiming hairdressing, wristwatches, spectacles, hearing aid batteries, private medical and physio expenses, and child-care costs. In every case, the taxpayer was unsuccessful as there was no nexus between the expenditure and generating income for the business. The items were not specific enough to their occupation and had an element of private benefit.

If you purchase a pair of shoes kept at the hospital and used only in theatre, then this could arguably be claimable, although we cannot guarantee this.

Home Office

If your primary office is at home and you are unsure if you can claim, download the guidelines for home offices.

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