For small business tour operators, it can be hard to know all of the things you can claim off your tax.

In terms of tax deductions, the rules vary depending on

  • The business structure you operate under;
  • The nature of each expense; and
  • Your country’s specific laws.

Here’s what you need to know so you can save as much as possible.¬†Below is information taken from Australia & the USA, which you can use as a benchmark.

Depreciating Assets

Tour operators can claim a decline in value of a capital asset. You can do so with things like computers, shuttle vehicles, tour equipment, and amounts spent on improvements (not repairs) to an asset.

In Australia, the cost of an asset is the amount paid for it + any additional payments on transporting and installing it. Also, the amount you can claim will be less if you:

  • Own the asset for less than a year.
  • Use the asset only partly for business purposes.
  • Have owned the asset for some time before you started doing business.

In Australia, any asset costing less than $6,500 is eligible for an immediate 100% tax deduction.

Salary & Wages

In Australia, the deduction you can claim depends on how your business operates:

  • Company or trust. You can claim for the salary and wages of you and your employees
  • Partnership. You cannot claim for the salary and wages of you or your partner.

In America, you can deduct the pay you give your employees as long as the pay is in cash, property or services.

Utilities

Any expenses that are directly tied to the running of your business are tax deductible. So you can claim deductions on water, power, gas and phone bills. This is good news if your tour or activity uses a lot of electricty (for example, indoor skydiving).

If your phone isn’t used purely for business purposes, you will have to claim only a portion of your bill.

Advertising and Marketing

What you spend on advertising and promotion (like printing business cards, placing ads, paying for business listings etc) is tax deductible – as long as it is directly related to your business. You can even claim deductions on tour guide job advertisements!

Theft and Loss

Generally, if the theft or loss was unavoidable, then you can claim a tax deduction. For example, in the case of theft by an employee. Otherwise – as in the case of accidents – you can’t deduct it.

Service Fees

As a necessary operating expense, credit card processing fees are definitely tax deductible. This is good news for tour operators because it means you can save on your merchant account fees.

Repairs and Maintenance

Generally, what you pay to repair your property or equipment to keep it in operating condition is deductible. For example, if the shuttle van you use to pick up and escort your customers breaks down, you can claim a deduction on its repairs.

Travel Expenses

All your business travel expenses are tax deductible. For example, you may be flying to a specific trade show that your trade association is running.

In this case, you must record:

  • The particulars of each business activity you do on the trip.
  • The nature of each business activity you do on the trip.
  • The approximate time the business activity began.
  • How long the business activity lasted.
  • The name of the place you engaged in the business activity.

Airfare, hotels, and other on-the-road expenses are generally 100% deductible.

Software

Any software you use that is key to running your business is tax deductible. For example, you may use Xero for accounting, and Rezdy for managing your bookings. You can claim tax deductions on both of these services.

Speaking of software, if you are looking for an easy way to accept and manage online bookings, why not take a free trial of Rezdy? It’s commission-free with no lock-in contract.

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10 Things Tour Operators Can Claim for Tax Deductions

,

For small business tour operators, it can be hard to know all of the things you can claim off your tax.

In terms of tax deductions, the rules vary depending on

Here’s what you need to know so you can save as much as possible.¬†Below is information taken from Australia & the USA, which you can use as a benchmark.

Depreciating Assets

Tour operators can claim a decline in value of a capital asset. You can do so with things like computers, shuttle vehicles, tour equipment, and amounts spent on improvements (not repairs) to an asset.

In Australia, the cost of an asset is the amount paid for it + any additional payments on transporting and installing it. Also, the amount you can claim will be less if you:

In Australia, any asset costing less than $6,500 is eligible for an immediate 100% tax deduction.

Salary & Wages

In Australia, the deduction you can claim depends on how your business operates:

In America, you can deduct the pay you give your employees as long as the pay is in cash, property or services.

Utilities

Any expenses that are directly tied to the running of your business are tax deductible. So you can claim deductions on water, power, gas and phone bills. This is good news if your tour or activity uses a lot of electricty (for example, indoor skydiving).

If your phone isn’t used purely for business purposes, you will have to claim only a portion of your bill.

Advertising and Marketing

What you spend on advertising and promotion (like printing business cards, placing ads, paying for business listings etc) is tax deductible – as long as it is directly related to your business. You can even claim deductions on tour guide job advertisements!

Theft and Loss

Generally, if the theft or loss was unavoidable, then you can claim a tax deduction. For example, in the case of theft by an employee. Otherwise – as in the case of accidents – you can’t deduct it.

Service Fees

As a necessary operating expense, credit card processing fees are definitely tax deductible. This is good news for tour operators because it means you can save on your merchant account fees.

Repairs and Maintenance

Generally, what you pay to repair your property or equipment to keep it in operating condition is deductible. For example, if the shuttle van you use to pick up and escort your customers breaks down, you can claim a deduction on its repairs.

Travel Expenses

All your business travel expenses are tax deductible. For example, you may be flying to a specific trade show that your trade association is running.

In this case, you must record:

Airfare, hotels, and other on-the-road expenses are generally 100% deductible.

Software

Any software you use that is key to running your business is tax deductible. For example, you may use Xero for accounting, and Rezdy for managing your bookings. You can claim tax deductions on both of these services.

Speaking of software, if you are looking for an easy way to accept and manage online bookings, why not take a free trial of Rezdy? It’s commission-free with no lock-in contract.