COVID-19 Updates

Tax Office Urged To Fix RAT Tax Traps

The Australian Tax Office needs to urgently clarify the tax deductibility status of Rapid Antigen Tests (RAT), the National Road Transport Association said today.

NatRoad says conflicting information is confusing small to medium businesses and adding to uncertainty about living with COVID.

NatRoad has called for RATs to be provided free-of-charge to all essential workers, including people working in supply and logistics, to keep the supply chain functioning.

“This issue was raised in the ATO website’s online forums back on January 4 and the Tax Office is still to provide clarity,” said NatRoad CEO Warren Clark.

“We understand that where the employer incurs expenditure providing RATs to employees, the cost should be tax-deductible because it’s an expense incurred in carrying on the business, and the employer has a duty of care to safeguard employees in their workplace.

“But where the employer provides RATs at no cost to employees, this may be regarded as providing a fringe benefit and subject to Fringe Benefits Tax.”

Mr Clark said the situation was unclear for individual taxpayers who were working as contractors.

“According to tax experts, an individual taxpayer may qualify for a tax deduction for a RAT where they are required by their employer to take a test before undertaking work,” Mr Clark said.

“The ATO may take the view that a RAT taken before commencing work is ‘not on work time’ and therefore is not tax deductible.

“With all of the stresses already associated with managing the pandemic, lack of clarity about tax should not be another problem. The ATO should act now.”

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