Businesses may claim an iPad in their tax returns as if it were a laptop, but only if the gadget is primarily being used for corporate use and not as a private purchase, the Australian Taxation Office has confirmed.
The confirmation comes as a number of businesses, including a restaurant in Sydney and airline giant Jetstar, are beginning to incorporate Apple’s latest gadget as part of their work infrastructure.
The ATO has confirmed the iPad will be treated as a laptop for tax purposes, making it subject to the same tax liabilities and benefits as any other laptop computer despite its “tablet” status.
An ATO spokesperson said businesses would be able to claim deductions for running costs, including software and internet connection expenses.
However, he said the actual purchase price would be a capital expense, and therefore businesses would only be able to access capital depreciation benefits available for any other laptop.
The exception is for businesses with net turnover under $2 million, who are able to claim an immediate write-off for business assets worth less than $1,000.
But individuals are out of luck – the ATO says the iPad cannot be claimed unless it’s being used for work purposes.
“Users will not be able to claim a deduction for private use,” the ATO said. “For where the iPad is being used for both private use and income earning purposes, the buyer will need to separate those activities.”
Bentleys director Chris Hope says this means users will need to keep a 12-week log of how time on the iPad is split between private and corporate use.
“If it is used for work, you need to determine what percentage of it was used for work and for private use. You could also potentially salary package the iPad, as long as it was being used for business use, otherwise it might be classed as a non-salary benefit.”
The ATO did not confirm whether the iPad could be included in salary packing arrangements.
But Deloitte partner Frank Klasic says if this is allowed, businesses must consider how the device is being used.
“The ruling of the iPad being a laptop is important, because under the FBT act the provision of a computer to an employee doesn’t give rise to FBT – but only if it is used for business purposes. So it couldn’t be given this way and then used for private purposes. It has to be for work.”
Frank Brass, regional manager for H&R Block, says a business will be able to claim 100% of the depreciation if the iPad is being used entirely for the business. “This is really just the same as any other laptop, and all the other rules apply.”
The advice comes after businesses are beginning to incorporate the iPad into everyday use. A restaurant in Sydney has replaced its menus with several iPad units, while Jetstar will soon be trialling iPads used as in-flight entertainment.
Pizza chain Pizza Capers has already introduced iPads for employees to take orders, with the company saying they are a clear advantage over traditional cash registers.
The ATO has already said the iPad can be claimed under the education tax rebate, which applies to expenses for primary and secondary school students.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
