The latest tax consideration is centred around office pets. Many people returned to a job post-pandemic with their dog and this has become the ‘in thing’ at many workplaces.
In fact, some become office therapy pets and can even be seen as an integral part of business operations – so much so that they become relevant as tax time draws closer, says Coco Hou CPA, CEO of Platinum Accounting Australia.
“A lot of people are starting to ask me about their office dog. They want to know if their dog is tax deductable but the answer is not so simple. There are a few things to consider,” she explains.
Here, Coco answers key questions about dogs, work and the ATO:
Can I pay a dog?
“To receive an income in Australia you must be registered with the ATO. Dogs cannot be registered tax payers in Australia. So no, you cannot pay a dog. However, the expenses associated with the dog may be considered from a tax point of view.”
Are office dogs tax deductible?
“The ATO is very clear that in Australia, expenses for an office dog are generally not tax deductible unless you can demonstrate that the dog is essential for carrying out the duties of the business.”
What about security dogs?
“Some businesses may have dogs as a form of security and protection. For instance, a security dog at a warehouse might have associated costs that are deductible, such as training, food, veterinary care and other maintenance expenses directly related to its work. In this situation, as long as the expenses being claimed are directly associated with the cost of the dog and its work, then the ATO may consider these costs as business expenses.”
And service dogs?
“If a dog is brought into a workplace and it is more of a pet or for the employee’s comfort and doesn’t perform specific security or operational duties essential to the business, its expenses would not typically be tax deductible. The ATO tends to be quite strict on what constitutes a legitimate business expense.
In summary…
It seems that if the dog is part of the business’s operations and plays a critical role day-to-day, the associated expenses – such as transport, food, insurance, veterinary bills and uniform – could be considered by the ATO.
Coco underlines that EAs should encourage their bosses to work through pet-related expenses with their accountant and tax advisor: “The end of financial year is fast approaching so I recommend having those conversations now,” she adds.
