It’s officially tax season, and one question is on every small business owner’s lips: ‘Can I claim back tax on that?’
In life, two things are certain: coffee and taxes. Something like that. And whilst you definitely need a coffee, or five, to help you pile through the paperwork and collate your numbers, have you ever considered that the very coffee you’re clinging to might be tax deductible itself?
So in this blog, take a deep breath and a sip of hot coffee, while we go through the information you need to understand… is a coffee machine tax deductible?
Is A Coffee Machine Tax Deductible?
Whether coffee machines should be regarded in the office as a necessary business expense or an optional luxury is up for debate. Generally speaking, however, an office coffee machine that your business owns is regarded for tax purposes as a company asset. Therefore, it cannot be considered tax deductible.
However, it can become a bit more nuanced than that. For example, with office items that depreciate over time, such as your company computers, company printers and your company coffee machine, there will be ongoing costs associated with their use, such as purchasing replacement parts or requiring professional technical service.
There is some scope to assume these could fall under the definition of business expenses – as ‘expenses incurred in the operation of a business‘, and so you may be able to reclaim a portion of their cost.
Is A Coffee Machine Taxable At All?
The good news is that you should generally be able to deduct some of the secondary upfront costs involved in providing coffee at work. Consumables and coffee products such as beans, tea, biscuits and other negligible amounts that are ‘impracticable to account for’ are most often tax deductible.
Make sure you gather all the necessary documentation before claiming anything. This includes receipts that show the amount of any purchases and prove that they took place during the financial year you’re claiming within. If you have a company credit card, it’s best to make all coffee and associated purchases with your business account, to make it easier to find (and display) these payments.
Tax Deductions For Work-From-Home Business Owners
Did you know that if you work from home, you can claim back a number of expenses associated with your capacity for work, including rent and insurance? Within these categories are ‘utilities’, so you might be wondering whether your personal coffee machine is tax deductible.
Unfortunately, this is unlikely, as utilities are defined as those used exclusively for business purposes and which are directly related to earning income. Unless you own a coffee company and you’re inviting potential businesses and customers to taste your coffee before committing to a wholesale order or partnership, you probably won’t be able to claim it as a working-from-home business expense.
Just like your kettle, milk frother or toastie maker, your coffee machine will be seen as a personal comfort item for tax purposes. However, home office workers can at least still claim back a portion of electricity, water and even internet bills.
Can You Claim Back Tax For A Rented Office Coffee Machine?
In fact, it’s actually much easier to reclaim tax on rented office coffee machines than purchased ones. As long as the coffee machine is only used in the office, for business purposes, you should be able to deduct tax. This works by removing the amount paid for your office coffee machine from your profit figure – before you are taxed on the remaining profit.
There are a couple of small caveats – so just make sure your usage falls within these frameworks. The expense should be relatively small in the grand scheme of your business operations. The coffee should only be provided by you (an employer) to your employees. Serving guests, clients or the occasional friend who pops in is ok, but you can’t turn your coffee machine into a hole-in-the-wall side hustle, or take it home for personal use between office hours.
The coffee you provide at work should be with the aim of promoting productivity, contentment and good health and mindsets within your team. Essentially, it’s not there to become a shortcut to an espresso martini station! Nor should you be charging your teams for each coffee they consume on the premises.
In Conclusion: Is A Coffee Machine Taxable?
The answer to ‘is a coffee machine taxable’ is unfortunately not such a straightforward one for businesses to answer as the EOFY rolls around once more. As always, it’s best to consult with a tax professional to ensure compliance – and make sure you’re claiming all the expenses you can to save your business from paying unnecessary tax.
If you’ve purchased an office coffee machine for you and your colleagues since last February, or you’re staring around your office wondering what you can claim back, there is certainly potential in your machine, and at least your coffee consumables. However, in general, your coffee machine for office or home business use is not tax deductible, unless it’s a rented model.
Read this blog and still not sure what the appropriate solution is for you? Our customer service team will be happy to answer any questions and even recommend the most economical purchasing or rental options tailored to your company size and operation.
We work with businesses large and small across the country, pairing great coffee machines and premium coffee with hard workers. We also have a selection of rental agreements, so if a tax rebate on your coffee machine is important to you, we can match you with the right machine. Get in touch with us today and find out how we can help.
