The ATO knows that many business owners naturally help themselves to their trading stock and use it for their own purposes.
Taking stock home is common practice that can occur in businesses such as butchers, bakers, corner stores, cafes and more.
The Tax Office regularly issues guidance for business owners on the value it expects will be allocated to goods taken from trading stock for private use. The table below shows these values for the 2019-20 income year.
The basis for determining values is the latest Household Expenditure Survey results issued by the Australian Bureau of Statistics, adjusted for CPI movements for each category.
Note that the ATO recognises that greater or lesser values may be appropriate in particular cases, and where you are able to provide evidence of a lower value, this should be used.
For further information, see the Tax Office guidelines. Failure to disclose income adjustments that the Tax Office would expect to see in a tax return, for example in an audit, may attract penalties and interest charges on additional tax payable.
Your bookkeeper or management accountant may help you maintain the correct records in your accounts to stand up to Tax Office scrutiny, including the value of the goods taken to be reported as income:
- the date
- a description of what was taken
- the reason stock was taken
- the cost or market value of the item (excluding GST).
This information is general in nature and is not intended to replace professional advice specific to your situation. Please contact us to discuss how Electra Frost Advisory can assist with your company's stock management and accounting systems.