Item 5 Business expenses

See label P on the ATO website website for further information.

This item is for non-residents only. Australian residents shouldn't enter anything at this label.

At label P, we've provided Schedule B. See Schedule B (business income worksheet).

Primary production expenses don't apply to label P.

At label P, show all expenses directly relating to gaining the income shown at item 5 label B - Gross payments subject to foreign resident withholding (excluding capital gains).

Don't include or show these amounts at any other expense label at item 5.

Don't include any expenses incurred in gaining income that isn't assessable in Australia.

See label C on the ATO website website for further information.

At label C the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label C, show the amount for labour and services provided under contract. Don't include the amount for salary or wages.

See label D on the ATO website website for further information.

At label D, the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label D, show the employee superannuation expenses incurred for the income year.

See label E on the ATO website website for further information.

At label E, the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label E, show the cost of any expense incurred in deriving the gross proceeds or earnings of the business:

• produced
• manufactured
• acquired, or
• purchased for manufacture, sale or exchange.

See label F on the ATO website website for further information.

If the TOFA rules apply to the partnership, include all the partnership's bad debts from financial arrangements subject to the TOFA rules At label F item 5.

If a TOFA gain or loss was made, you must also complete item 31 labels M or N.

At label F, the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label F, show the bad debts expenses incurred for the income year.

See label G on the ATO website website for further information.

At label G the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

Enter the expenses incurred through both finance and operating leases on leasing assets, such as motor vehicles, plant or other equipment.

Don't include the cost of leasing real estate, or capital expenditure incurred to terminate a lease or licence.

See label H on the ATO website website for further information.

At label H, the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

Enter expenses as a tenant on rental of land and buildings used in the production of assessable income.

See label I on the ATO website website for further information.

At label I, the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

If the TOFA rules apply to the partnership, include all interest incurred:

• on money borrowed within Australia and overseas to acquire income-producing assets,
• to finance business operations, or
• to meet current business expenses from financial arrangements subject to the TOFA rules at label I.

If a TOFA gain or loss was made, you must also complete item 31 labels M or N. 

See label J on the ATO website website for further information.

At label J the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label J, show the royalty expenses for the income year. Include royalties paid to residents and non-residents.

See label K on the ATO website website for further information.

Show at label K the book depreciation expenses for depreciating assets other than for those assets allocated in a prior year to a general small business pool or the former long-life small business pool.

For assets allocated to such a pool, include at this entry the amount of the pool deduction to be claimed for tax purposes. See Small business entities for information about small business entity depreciation deductions.

For a partnership that is not a small business entity and has a turnover from $10 million and less than $50 million, include here claims for assets costing less than $30,000 purchased from 7.30pm (AEDT) on 2 April 2019 and first used or installed ready for use by 30 June 2019.

Small business concessions: changes to simpler depreciation rules.

Under these rules, if you purchased assets from 7.30 pm (AEST) on 12 May 2015 and first used or installed them ready for use, then from:

7.30 pm (AEST) on 12 May 2015 until 28 January 2019, you can immediately deduct the business portion of most depreciating assets costing less than $20,000 each (the instant asset write-off threshold).

29 January 2019 until before 7.30 pm (AEDT) 2 April 2019
You can immediately deduct the business portion of most depreciating assets costing less than $25,000 each (the instant asset write-off threshold).

7.30pm (AEDT) on 2 April 2019 until 30 June 2020
You can immediately deduct the business portion of most depreciating assets costing less than $30,000 each (the instant asset write-off threshold).

If the trust is an eligible small business entity and has chosen to use the simplified depreciation rules, show at label K the total depreciation deductions being claimed under the simplified depreciation rules and the UCA rules. The trust does NOT need to complete a capital allowances schedule.

The 'lock out' laws have also been suspended for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for five years if they have opted out) until the end of 30 June 2020.

A small business entity choosing to use these simplified depreciation rules must use both the immediate write-off and the pooling where applicable. You can’t choose to use one and not the other.

Other businesses

Some depreciating assets are excluded from these simplified depreciation rules, but you may be able to claim a deduction under the UCA rules, for example horticultural plants (including grapevines) are excluded from the small business entity depreciation rules and are deducted under special UCA provisions. Refer to Appendix 6 in the ATO Trust return instructions.

Click Schedule C (primary production worksheet) if you are a primary producer to have your livestock calculations done. Click Schedule B (business income worksheet) if you are a sole trader or have professional business income.

Use the Depreciation worksheet (d) to manage all depreciating assets under the small-business simplified depreciation rules, the UCA or Pooling.

See label L on the ATO website.

At label L the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label L, show motor vehicle running expenses only. These expenses include:

• fuel
• repairs
• registration fees, and
• insurance premiums.

They don't include the following expenses shown at label:

• G Lease expenses

• I Total interest expenses

• K Depreciation expenses.

For calculating motor vehicle expenses, use either the cents per km or the logbook method.

See label M on the ATO website.

At label M the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label M, show the expenditure for repairs and maintenance of plant, machinery, implements and premises.

Record keeping

To support any claim for repairs, keep source records showing full details of the nature and cost of repairs to each item.

See label N on the ATO website.

At label N the application provides:

• Schedule C for primary production expenses. See Schedule C (primary production worksheet).

• Schedule B for non-primary production expenses. See Schedule B (business income worksheet).

At label N, show the total of all other business expenses for the income year. Don't include expenses already included at labels P to M. For example, travel expenses.

If what you show at label N includes an amount which is brought to account under the TOFA rules, also complete item 31 Taxation of financial arrangements (TOFA) 31 labels M or N.