Common Errors for Electricians on the Notice of Assessment and How to Fix Them
Common errors for electricians on the Notice of Assessment can catch you off guard, especially when you’re busy running your business. If you’re not careful, mistakes on your tax return can show up on your Notice of Assessment, affecting how much tax you pay, your tax refund, or even whether you owe money to the Australian Taxation Office (ATO).
Electricians have unique challenges. You deal with tools, vehicles, materials, and jobs that often change. This means your financial records, work related expenses, and totals on your income tax return can get complicated fast. The ATO looks at all the details carefully to make sure your tax situation matches what’s in their records. If things don’t add up, the ATO may send you a letter, adjust your tax assessment, and sometimes ask for more tax.
This article walks through the most common mistakes electricians make that show up on their Notice of Assessment. We explain what can go wrong, why it happens, and—most importantly—what you can do to fix it.
Understanding What is Notice of Assessment
Your Notice of Assessment is the letter you get from the ATO after you lodge your income tax return for the income year. It breaks down your taxable income, any capital gains tax owed, and your overall tax situation for that financial year. The notice will show the figures the ATO has on record, which are based on the income and deductions you reported, your tax file number, and any relevant tax laws that affect your assessment.
You can access your Notice of Assessment online by linking your myGov account to the ATO’s online services or request it be sent to your postal address. Always check your bank details on the notice for direct deposit of any tax refund, and double-check the due date for payment if you owe tax. Making sure all personal information, including bank details and your tax file number, are correct helps avoid delays or mistakes.
If the numbers on your notice don’t match your expectations or you see any unfamiliar capital gains listed, review your tax records and income tax return for the year. Errors can happen due to changes in tax laws or updates in your taxable income reported. If you’re unsure, a registered tax agent or tax professional can help make sense of your Notice of Assessment and guide you through your tax journey.
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Most Common Assessment Errors for Electricians
Here are the most common mistakes electricians make during tax assessment, and how each one can impact your bottom line if not managed correctly.
Tool and Equipment Mistakes
Electricians need a lot of tools. Some you buy as a set, some as single items. The ATO lets you claim small tools (under $300) right away, but if you buy a big set (like a socket kit for $350), you can’t claim each piece separately. You have to claim the whole set over several years, not just the bits and pieces.
Another mistake is forgetting to update your tool list when things break or get thrown out. If you don’t keep your records up-to-date, you might be claiming for something you no longer have. That can raise questions on your next tax assessment.
A common error is mixing up business and personal use. If you use your tools or vehicle for personal jobs, the ATO only lets you claim the work side of things. If you can’t show how much is work and how much is personal, the ATO might drop your claim altogether.
Vehicle Expenses
A lot of electricians use their car, ute, or van for work. The ATO lets you claim fuel, repairs, and other running costs, but only for the business part. To prove this, you need a logbook. You might use the cents per kilometre method, but you can only claim up to 5,000 km a year. If you go over, you’ll need to use the logbook method.
A big mistake is using old logbook percentages or not keeping a logbook at all. If your work changes—say, you start doing more jobs further away—your old figures might not be right anymore. The ATO checks these numbers against industry averages. If yours look too high or too low, it can trigger a review.
Double claiming is another problem. If your client pays for your travel or fuel, you can’t also claim it as a tax deduction. The ATO’s online services can spot these overlaps easily, so keep your records honest.
GST Reporting
If you’re registered for GST, you need to report it on your business activity statement. One mistake is claiming GST credits on things like wages, super, or purchases from suppliers who aren’t registered for GST. You can only claim credits on things you actually paid GST on.
Timing matters, too. If you report GST based on when you get paid, make sure you only include the cash you’ve actually received. Don’t claim GST credits on money you haven’t got yet, or you’ll end up with a tax bill later.
If your business does both taxable and non-taxable jobs, you need to split GST correctly. For example, some maintenance work might be GST-free, but most installations are taxable. If you get this wrong, your GST liability could be off, and the ATO will pick it up on your next assessment.
Income Underreporting
Some electricians still get paid in cash for small jobs. It’s easy to forget to include these in your income tax return. But the ATO has ways to check: they look at your bank account details, your online payments, and sometimes even ask your suppliers for information. If your income looks too low for the amount of work and expenses you have, you might get a letter.
Bartering can be tricky, too. If you swap electrical work for building supplies or other services, you have to include the value of those swaps as income on your tax return. It’s not just about cash.
Sometimes, income is simply missed because of a messy invoicing system. If you use different books for quotes, job cards, and billing, it’s easy to lose track. That can lead to understated income and a bigger tax bill if the ATO finds it.
Business Activity Statement (BAS) Slip-Ups
Your BAS is how you report GST, Pay As You Go (PAYG) instalments, and other taxes during the year. If your income jumps up or down, your PAYG instalments need to match. If you pay too little, you’ll owe more at tax time, plus interest.
If you have both staff and subcontractors, you need to withhold tax for employees. If you get this wrong, the ATO will adjust your BAS and you could face penalties.
Timing is crucial. If you get a big job that runs over several quarters, make sure you split the income and costs correctly on your BAS. If you lump everything together, the ATO might question your numbers later.
How These Errors Show Up on Your Notice of Assessment
When the ATO thinks your tax return is wrong, they change the numbers on your Notice of Assessment. You’ll see these as adjustments to your reported income, work related expenses, tax offsets, or even your tax refund. If your income goes up, so does your tax payable. If your deductions are cut, you might owe more tax. If your GST credits are wrong, you could get a bill for the shortfall, plus interest.
The notice will also show any penalties or interest you have to pay, especially if the error happened because you were careless or didn’t keep good records. Interest adds up quickly from the due date until it’s paid.
If you think the ATO’s adjustment is wrong, you have time to object. You usually have a couple of years from the date on your notice, but it’s best to sort it out quickly. Gather your supporting documentation and talk to your accountant or a registered tax agent.
How to Avoid These Mistakes
Here’s what electricians can do to stay on top of tax requirements and avoid the most common assessment mistakes in their business.
Keeping Good Records
Use a simple spreadsheet or an app to track your tools, vehicles, and expenses. Take photos of receipts or save them digitally. If you use your car for work, keep a logbook and update it when your work patterns change.
If you buy a tool set, record it as a whole, not as separate parts. Update your asset register if you sell or scrap equipment. This makes your next tax return easier and helps if the ATO has questions.
Regular Financial Check-Ups
Every month, check your bank account details, your sales, and your expenses. Reconcile your invoices and payments so nothing gets missed. If you’re registered for GST, review your GST position before lodging each BAS.
If you use MYOB, Xero, or other accounting software, make sure it’s set up right for your business. If you’re not sure, a registered tax agent can help you get it right.
Working With a Tax Professional
A good tax agent or accountant understands the Australian tax system and the needs of tradespeople. They can help you prepare your income tax return, deal with the ATO’s response, and make sure you claim all the deductions you’re entitled to.
If you get a Notice of Assessment that doesn’t make sense, your accountant can review it with you and help you lodge an objection if needed. They can also set up payment plans if you have trouble paying your tax bill.
If you’re ever in serious hardship, let the ATO know. They may give you more time to pay or reduce your interest. But you have to ask—the ATO won’t do it automatically.
Fixing Mistakes If They Happen
If your Notice of Assessment shows adjustments, don’t panic. Double check your tax records and supporting documentation. Compare the notice to your previous tax return and make sure all your details are correct.
If you made a mistake, you can amend your tax return through the ATO’s online services or with the help of a tax agent. The sooner you fix it, the less interest and penalties you’ll pay. If you can’t pay the whole amount at once, you can set up a payment plan with the ATO.
If you think the ATO is wrong, lodge an objection through your myGov account or with your tax agent. You’ll need to provide supporting documentation and explain why you disagree with the assessment. The ATO will review your case and let you know their decision. If you’re not sure what to do, talk to a professional. The ATO’s website has plenty of information, but sometimes it’s better to get advice tailored to your financial circumstances.
When to Get Extra Help
As your business grows, your tax affairs get more complex. If you start investing in property, get capital gains, or have income from different sources, things can get tricky. If you get a letter from the ATO, get a notice that’s hard to understand, or get behind on your tax obligations, don’t ignore it. Get help early.
Even if you’ve done your own tax returns in the past, a tax professional can save you time, stress, and money in the long run. They can help you plan for future tax returns, make sure you’re not missing out on tax offsets or credits, and help you stay on top of your duties.
Final Thoughts
Your Notice of Assessment (NOA) is a clear summary of your tax journey for the year, including payment advice that tells you how and when to pay any amount owed. If you get things right, you’ll know exactly how much tax you have to pay or get back, and the notice will show your payment options if you have a balance to settle. If there are mistakes, the notice points them out, so be sure to keep good records, review your assessment carefully, and get help if you’re not sure.
At ACT Tax Group, we work with tradespeople every day. We know how easy it is for busy electricians to make mistakes with tools, vehicles, GST, and income. Our job is to help you get it right, keep your tax affairs in order, and make sure you’re getting all the deductions and credits you’re entitled to. If you ever have questions about your tax return, your Notice of Assessment, payment advice, or your overall tax situation, we’re here for a free consultation.