The ATO has released a statement in regard to trading stock that is used for private use. The ATO reminds businesses that if goods are taken from trading stock and then used for personal use the value needs to be included in the assessable business income.
The term ‘trading stock’ means anything that is used to produce or manufacture (the ATO uses the example of flour and yeast for a Bakery to illustrate this point). If this trading stock is taken ‘home’ and used for personal use, make sure that the business reports the actual value of the trading stock as income in the business accounts.
The ATO has noticed that some businesses are not accounting for trading stock taken for personal use correctly. If this occurs then the ATO may see this as possible reason to review activities (audit).
