This month, the Federal government announced that Rapid Antigen Tests (RATs) used for Covid-19 testing will be tax-deductible if used to test before attending a place of work.
They will also be exempt from fringe benefits tax (FBT) for businesses when they are purchased for work-related purposes.
This means that for every COVID-19 test you pay for in order to do your job or run your business, some of that cost will be returned to you at tax time (if you keep your records).
Like most things relating to tax, it isn’t entirely straightforward, so here is all the information you need to get your RATs (rapid antigen tests) in a row come tax time.
Any test that has been bought in the 2021/2022 financial year can be claimed
A business’ FBT liability would be decreased by $20 for a dual-pack of RATs, while a person on more than $45,000 (at a tax rate of 32.5%) would receive around $6.50 back in tax for a two-pack of RATs worth around $20.
This legislation will be in effect from the 2021-22 FBT and income years and will be backdated to July 1, 2021.
This means that any test purchased after July 1 will be covered, but not any bought before that day, even if you took the test in July.
In the interim, if you have incurred expenses for COVID-19 tests, you should keep a record of those expenses. Much like you would for any tax-deductible expense, receipts of any purchase of RATs need to be kept and noted.
However, understand that RATs tests can only be claimed at the moment if they were bought for work-related purposes. If they were purchased for personal use, they are currently not able to be claimed on your tax return.
If you require help with your business’s FBT liability, your personal tax or simply have a query, we are registered tax agents able to assist you in your endeavours. Come speak with us.