Tax time. Don't you love it? Well, it's got to be done, and done right.
Tax time. Don’t you love it? Well, it’s got to be done, and done right.
Fine print first
As a mining industry professional, you may be eligible for a range of deductions over and above the usual. But first, some fine print. The advice below is of a general nature only and doesn’t take into consideration your personal circumstances or objectives. When preparing your tax return, make sure to follow Australian Taxation Office (ATO) guidelines or seek professional advice.
You can’t claim travel expenses between your home and the departure spot nominated by your employer under FIFO arrangements. Nor can you claim relocation expenses for moving closer to a new employment site.
Australian residents are taxed on their worldwide income, so if you fly into a foreign site your income is subject to Australian tax law. You’ll also need to consider the tax laws of the foreign country. Everyone’s situation is different so, in these cases, it’s good to seek advice from a professional tax adviser.
You may be eligible for a ‘zone tax offset’ if you live or work in a remote or isolated area of Australia (but not an offshore oil or gas rig) for at least half the tax year. What’s more, if you lived in a remote area for less than half the current year but also in previous years, you may still be eligible. See the ATO for more information on zone tax offsets.
On call and online
You can claim work-related phone calls plus line and handset rental if you can show that you were on call or required to phone your employer while away from your workplace. Line and handset rental costs will be split between work and private use. You may be able to claim a split of your Internet fees if you need to be available via email or you do some online training from home.
A good rule to remember is that expenses are usually deductible if they relate solely or primarily to the work you do or the environment you work in.
You can’t claim for the cost of normal clothes like jeans and shirts, but you can claim on compulsory uniforms and protective gear if you have to provide it yourself (e.g. overalls, steel-capped boots). You can also claim on laundering uniforms and protective clothes.
Don’t forget sun protection (sunscreen, hats, sunglasses and sun-protection shirts) and other equipment that your employer might not provide (e.g. gloves, goggles, masks, rubber boots, winter jackets).
Tools and equipment
You can claim an immediate deduction for tools or equipment if their cost is less than $300. If they cost more than $300, you can only claim on their gradual decline in value. Check the ATO’s guide to depreciating assets.
When it comes to tools, don’t forget diaries, logbooks, organisers, laptops, tablets, mobile phones and GPS units, and the various cases you use to carry them around. Work-related books, magazines and journals may also be deductible.
Licences and tickets
You can’t claim a deduction on your normal licence, but you can claim on further tickets and renewal fees if such licenses are necessary in your current role.
You can’t claim on pre-vocational courses (e.g. a Certificate II in Coal Mining). But you can claim self-education expenses for short courses or university and TAFE courses if they relate to your current work and the expenses aren’t otherwise reimbursed.
If you’re required to go to seminars or courses away from your usual place of work, the cost of travel, meals and accommodation may be deductible.
Don’t forget that, like the rest of us, you can claim on a range of general items like medical expenses (above a certain threshold), donations to charities, investment account bank fees, income protection, sickness and accident insurance, tax agent fees and even the cost of going to see your tax agent. Remember that tax rules change from year to year, so be sure to follow Australian Taxation Office (ATO) guidelines or seek professional advice.
Keep good records
You must keep good records of work-related activities and expenses. See the ATO’s guide to keeping tax records. One easy strategy is to keep everything, and let a tax adviser decide if the expense is deductible.
While MPi can’t recommend a particular tax professional, we think it’s a good idea to seek the services of a tax adviser who knows the mining industry ins and outs. A great way to find one is by personal recommendation, so ask around with your colleagues. You can also search online for a list of registered tax agents. A professional adviser will charge a professional fee, but this is a sound investment in your tax time affairs.
This article was contributed by Adam Finlay from The Feisty Empire. Any comments or feedback directed to Adam can be sent to firstname.lastname@example.org .
Disclaimer: The views and opinions of authors expressed do not necessarily state or reflect those of Mining People International.