Do you run a family business? Perhaps you occasionally take an item of stock for your own, or your family’s use – and don’t pay for the goods that you’ve taken. Well, the ATO want to know about it, because such transactions can come with a tax cost.
Where an item of property stops being held as trading stock but continues to be owned by you (for instance, if you own a clothing shop and take items of clothing for your own use), it is treated as if it has been sold to someone else so that the cost of the item is included in your business’s assessable income.
Records which are ordinarily required to be kept by a taxpayer to support the taking of such goods include the date the item is taken from stock, the reason the item is taken, a description of the item, and the cost of the item. A simple estimate of the cost of the stock taken is not sufficient under the tax law to support a claim.
Notwithstanding this, the ATO recognises that for certain businesses or industries – mainly in the fields of food and drink preparation and provision – it is difficult to determine the value of an item of trading stock taken for private use. For these taxpayers, a ruling is issued for each income year providing a schedule of values of goods that can be used as a guide to the amounts that the ATO will accept as estimates of the total value of items taken.
For the 2024–25 income year, Taxation Determination TD 2024/8 outlines the amounts that the Commissioner will accept as estimates of the value of goods taken from trading stock for private use by taxpayers in certain named industries.
The Schedule for the value of goods taken from trading stock for private use in the 2024–25 income year is as follows:
| Type of business | Amount (excluding GST) for adult or child over 16 years old | Amount (excluding GST) for child 4 to 16 years old |
| Bakery | $1,580 | $790 |
| Butcher | $1,040 | $520 |
| Restaurant or café (licensed) | $5,310 | $2,150 |
| Restaurant or café (unlicensed) | $4,300 | $2,150 |
| Caterer | $4,530 | $2,265 |
| Delicatessen | $4,300 | $2,150 |
| Fruiterer or greengrocer | $1,080 | $540 |
| Takeaway food shop | $4,480 | $2,240 |
| Mixed business (includes milk bar, general store and convenience store) | $5,420 | $2,71 |
For example, Margaret owns a fish and chip shop. Occasionally, she will take some of the seafood for her personal consumption. She takes the seafood to feed herself and her 2 children who are aged 10 and 12 years. During the year ended 30 June 2025, Margaret took seafood on numerous occasions, but she failed to keep proper records of the amount taken. Nonetheless, she estimates the cost of seafood taken for personal consumption to be $6,000 (excl GST) for the year. However, she is unsure that this is the correct amount.
Looking at TD 2024/8, one of the industries listed is “Takeaway food shop”. The tax ruling states the relevant amounts for this industry are:
- $4,480 (excl GST) for an adult/child over 16 years, and
- $2,240 (excl GST) for a child 4 to 16 years.
Therefore, the amount which she must include in the assessable income of her business for the 2024–25 year is $8,960 (ie $4,480 + $2,240 + $2,240). Of course, Margaret can use a different amount if this could be proven by written evidence (eg if she could prove that the amount taken actually cost $6,000) but she doesn’t have the required proof.
Mark Chapman is director of tax communications at H&R Block.