Accountancy question

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13 years 2 months ago #17881 by Rod Brown
Can a dairy farmer who was previously GST registered (ie Contract milking) but is now a dairy farm manager on a salary plus bonuses claim as a tax expense his wet weather gear, gumboots and the other odd things he needs to buy as a necessity for him to carry out his duties as a manager, like he used to claim for before except I know he can't claim the GST.

Now sold block, of no fixed abode, building new house. Darling wife has passed 1 year ago.

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13 years 2 months ago #265554 by reggit
Replied by reggit on topic Accountancy question
Unfortunately I don't think he can...his employer can claim them for him if his employer is providing the gear for the employee though...? Perhaps persuade said employer to include wet weather gear in future as part of the employment conditions...? [:I]

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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13 years 2 months ago #265740 by powerguy
Replied by powerguy on topic Accountancy question
Not any kind of expert on this topic but I believe he could claim. Just like a mechanic can claim for tools AND protective clothing (overalls, steelcaps etc). Do you claim fro gumboots or other footwear? If so, claim for wet weather gear too.

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13 years 2 months ago #265751 by Ronney
Replied by Ronney on topic Accountancy question
I'm not an expert in this field either but I should think that if he is the one paying for them and they are necessary for his work, yes he could claim them.

The fact that Kevin and I are GST registered has no bearing on the fact that we can claim against tax for all the gear that is necessary for him to carry out his business (tools, vehicle etc.) and me to carry out mine (wet weather gear, boots, vaccines etc.)

My opinion only.

Cheers,
Ronnie

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13 years 2 months ago #265752 by reggit
Replied by reggit on topic Accountancy question

powerguy;245288 wrote: Just like a mechanic can claim for tools AND protective clothing (overalls, steelcaps etc). .


Can a mechanic filling out an IR3 as an employee claim these things? Your IR3 as an employee only allows you to claim such expenses as help filling out the tax form [:I]

When hubby was employed as a builder he wasn't able to claim any of his tools or boots etc. The moment he became self-employed he could.

Ronney, agree GST has nothing to do with it, but the key thing you said was that you could claim for stuff you needed to run his business.

I'm no expert either, so Rod, be interested to hear what the IRD have to say. Get in quick and call them before they shed all their staff and go back to half hour waits before the phone is answered :rolleyes:[}:)] :D

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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13 years 2 months ago #265805 by Seaside
Replied by Seaside on topic Accountancy question
I agree with tigger - off the top of my head. If you are self-employed, you can claim your expenses. If you are employed, you can't. Just think about all those expenses that employees would be able to claim if tax law allowed - the cost of getting to and from work, child care, work clothes... In some cases, the employer will pay the employee allowances if they provide their own tools and work clothes.

OK, I found this on the IRD website. A PTS (personal tax summary) is for employees who have overpaid or underpaid tax (and therefore need to file a tax return. Otherwise, an employee does not have to file a tax return, but a self-employed person does). I've pasted below the relevant part from the IRD's webpage: www.ird.govt.nz/income-tax-individual/end-year/pts/#expenses

What expenses can be claimed on a PTS?

You can claim the following expenses on your PTS:
  • a fee charged by someone for completing your tax return
  • commission on interest or dividend income (but not bank fees)
  • interest on money you borrowed to buy shares or to invest, as long as the investment will produce some income that's taxable
  • premiums on loss of earnings insurance, provided the benefit from the insurance policy is taxable income.

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13 years 2 months ago #265817 by reggit
Replied by reggit on topic Accountancy question
Further to what Seaside has said...those expenses listed, according to the tax guide for IR3, cannot be claimed against income or wages, or even commission if you are also on wages/income from that same employer.

Therefore I take it you can only claim those things against income earned from dividends, investments, rental properties, sole trader status etc - in other words, non-employee income...[:I]

I know some employers give eg builders/mechanics/other tradespeople a tool allowance to maintain their own tools, but while that is tax deductible for the employer, it is not for the employee...

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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