Estimating business income for Farm Household Allowance - Farm Household Allowance

What farm business income is

Farm business income includes the income from both:

your farm enterprise
all directly related businesses.

Directly related businesses could include businesses such as any of the following:

agistment
contracting work using farm vehicles or machinery
processing or adding value to farm products
a café on the farm selling farm products.

To confirm if a business directly relates to your farm, call us on the Farmer Assistance Hotline.

What deductions we may allow

Your business income is your gross income, less any deductions we allow. You can’t claim as many deductions as you can in your tax return. Social security law and tax law are different.

Working out if you can deduct an expense can be complex. It may also depend on your business structure.

For more help and information, you can do any of the following:

use our Profit and Loss Statement form, which has more information about deductions
check with your accountant
call our Farmer Assistance Hotline.

Deductions we do allow

Some of the deductions we allow are:

costs needed to earn business income
depreciation of certain business assets.

Read about the forced disposal of livestock.

You can claim depreciation of business assets listed under Division 40 of the Income Tax Assessment Act 1997 (ITAA 1997). To claim depreciation of these assets, you’ll need a depreciation schedule.

Deductions we don’t allow

Some of the deductions we don’t allow include:

prior year losses
offset losses from other businesses that aren’t directly related to the farm enterprise
superannuation for sole traders or business partnerships
donations
borrowing costs
some types of capital expenses
entertainment
amortisation of intangible assets.

We also don’t allow these deductions:

private health insurance premiums
personal life insurance premiums
depreciation claimed under the small business entity concessions
instant asset write-offs claimed under the small business entity concessions.

When there’s a change to your income

Check your income estimate regularly. You need to update it whenever there’s a change to your income.

A wide range of things can affect your profit or loss. Some examples are:

winning or losing a contract
selling more or less livestock
expecting a bigger or smaller harvest
changing your business structure.

You may need to update your estimate if you get new information. Some examples are information about:

crop health
livestock numbers
sale prices.

Once you get the new information, you have 14 days to update your estimate.

How to submit your business income estimate

Applying for FHA

If you apply for FHA online, we’ll ask you to answer profit and loss questions and submit supporting documents.

If you use the paper claim form, you’ll need to supply an estimate of income and expenses in profit and loss format. This is an estimate only. It doesn’t have to be a formal statement from your accountant. You can use our Profit and Loss Statement form. If you have more than one business, you should complete a form for each business.

Doing or updating your annual estimate

We’ll write to you at the end of each financial year to request your income estimate. Your estimate should list all income and expenditure for the next full financial year. You should include a reason for any major change. You can use our Profit and Loss Statement form. If you have more than one business, you should complete a form for each business.

If you need help completing your estimate, call our Farmer Assistance Hotline.

When you do your annual estimate or update it, you can submit your estimate and any documents:

online
at a service centre
by post to:
Services Australia
Rural and Climate Change Services
Reply Paid 7816
CANBERRA BC ACT 2610

Using your online account, you can upload documents in PDF or JPG formats up to 5 MB per file.

Estimating business income

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