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Tax Deduction Update For RATs Tests

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.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.


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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier

David and Alison Parker

I have been consulting J L Noller and Co. (more specifically Jane) for six years and during this time I have found her to be professional, efficient and easy to discuss all accounting and taxation matters with. Her office team are all polite and friendly also.

David and Alison Parker

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Carl Gillmore

I have used Jane & the team for the last 6 years for all of my business & personal accounting needs. They have always been professional, easy to talk to & available when we have needed assistance.

Carl Gillmore

Carl Gillmore Landscape

John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier