Hello all, One of my friend told me about this 'scheme'. He created an ABN and basically wrote off just about all his expenses, eventhough he doesn't really have a legitimate business. Now, I was wondering how legal is this? It doesn't seem very legal to me. Can anyone give some advice on this? Thanks.
Will probably come under the "non-commercial losses" provisions ... Non-commercial losses: overview - fact sheet ... but if he gets audited, he may well be in trouble.
Thanks for the reply Sim. Yeah he probably would be in big trouble, although he's not taxed all that much. I've just read the fact sheet and aw this line: - have an assessable income from the activity of at least $20,000 So if the business had an assessable income of $20,000 then the business is able to have non-commercial losses. The question is, can I (as an individual) pay MY business $20,000 so that my business will be able to claim non-commercial losses? hehe
When you sign a tax return you are making a statutory declaration. You cannot claim deductions for expenses you have not incurred. Cheers, Rob