Running an NDIS business is incredibly rewarding, as you’re making a tangible difference in people’s lives. However, managing the financial side can be overwhelming. Between NDIS regulations and tax obligations, it’s easy to feel lost.
As an NDIS business ourselves, we understand your challenges. Filing your annual tax returns can sometimes feel like the Wild West of tax deductions!
This blog will equip you with knowledge on managing your tax deductions and guide you on how to claim a tax deduction the right way for your business.
But first, let’s look at the importance of staying efficient with your tax.
Why Tax Efficiency Matters
As an NDIS provider, every dollar counts towards supporting your participants and managing your income tax. Having greater tax efficiency also results in higher tax compliance, which increases your brand name.
Maximising your tax deductions allows you to reduce your tax and efficiently distribute it to other parts of your business. Here are some of the benefits we see when an NDIS service provider utilises their tax deductions:
Invest in growth: Hiring more disability support workers to enhance your service delivery. More funds mean you can invest in staff training, expand your service offerings, or upgrade your equipment – all of which can help you serve your NDIS participants better.
Increase staff wages: Tax maximisation allows you to attract and retain top talent by offering competitive salaries and benefits
Key Tax Deductions You Can Claim as an NDIS Provider
The Australian Taxation Office (ATO) acknowledges the specific needs of NDIS businesses and allows you to claim a wide range of deductions. While service providers may be tempted on claiming everything, prudence is key here.
Here are some of the typical deductions you might be able to claim:
Work-related expenses: This includes things like travel costs (including your car and public transport), phone and internet bills, stationery, PPE, subscriptions, and even the depreciation of equipment you use for work. Travel costs are typically claimed using the cents per kilometre method, which is found on the ATO’s website.
Occupancy costs: These include rent, utilities, and cleaning costs for your office space.
Staff expenses: Salaries, wages, superannuation contributions, and training costs for your NDIS support workers can be claimed as tax deductions.
Professional fees: Fees paid to accountants, bookkeepers, and lawyers can be deducted.
Legal and accounting costs: Expenses incurred in setting up your NDIS business, including business registration fees and costs for your support workers, are tax-deductible.
Oyster Hub Top Tax Rules
To help you make the most of your tax claim and not end up disappointed, you’ll need to keep records of all your claimable business activities. This means actual receipts of your transactions. The ATO may request evidence to support your deductions, so having a well-organised system is crucial for claiming the costs effectively.
For example, if your job involves driving a client to an appointment, use the logbook method to claim fuel, which is classified as a work-related expense.
Tax Planning Strategies for NDIS Businesses
While claiming deductions is essential, there’s more to tax efficiency than just tax relief.
Choose the right business structure: Sole traders, partnerships, and companies each have different tax implications. Consulting with an NDIS accountant can help you determine the structure that best suits your business goals.
Salary sacrifice: Consider salary sacrificing a portion of your income into superannuation to reduce your taxable income.
Prepay expenses: To enhance your ability to claim tax deductions for the upcoming income year. If possible, prepay some business expenses before the end of the financial year to increase your deductions for that period.
Claim capital allowances: Assets like computers, furniture, and vehicles can be depreciated over time, reducing your taxable income and maximising your tax return.
The Power of Partnership: Why You Need an NDIS Accountant
NDIS accounting comes with its own set of complexities. The NDIS framework is constantly evolving, and tax laws can be intricate. That’s where an NDIS accountant comes in to provide essential tax tips for your business.
Partner with Oyster Hub
Navigating the complexities of NDIS accounting requires expert guidance. Our NDIS accountants offer:
- In-depth knowledge of NDIS and tax regulations
- Personalised tax planning strategies
- Support during ATO audits
- Timely and accurate financial reporting
By understanding tax deductions and implementing effective strategies, you can significantly boost your NDIS business’s profitability. Oyster Hub is committed to helping you achieve financial success while maintaining the highest quality of care for your participants. Contact us today to learn more about our NDIS accounting services.
