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Some people think if they do some work at home or have a home office set aside, it is a second place of business and therefore the cost of getting to their normal workplace is tax-deductible. To qualify, the home has to be a significant place of work so that in fact constitutes a second work place.  Some of the factors making it significant include:

• A large percentage of the time is spent working at home, say 30-40%;
• files are kept at home;
• there’s a good business reason why you would work at home;
• the work produces a significant amount of income; 
• the work at home is integral to the business.

Not all factors need to be present and it will inevitably be a matter of weighing up those that are to make a judgement.

Tax and life insurance

BEWARE of life insurance agents who claim premiums on a life insurance policy can be tax deductible to a company. While this may be true, depending on who is going to get the proceeds of the policy (it needs to be an indefeasible – unable to be overturned – right of the employee) the premiums will nevertheless be subject to fringe benefit tax. This negates the benefit of having them tax deductible.

Income protection insurance premiums paid by an employer for an employee will be deductible and not subject to FBT if the employee would be taxable on any future payout.