Using your business stock for private use
If you take an item of trading stock for your private use, remember to include its value in your assessable business income.
Trading stock includes anything your business produces, manufactures, or acquires to manufacture, sell or exchange. For example, for a bakery it may include bread, flour, yeast and oil, and for a construction business, bricks and cement.
When you take trading stock for personal use, you have to record the actual value of the goods you take and report that amount as income in your business accounts.
To make this easier for some business types, the ATO publish a list of estimates they will accept as an annual amount in your business income (if you are a sole trader or partnership).
Why does this matter?
Some businesses are not accounting for this correctly in their business returns. This may contribute to a business falling outside the small business benchmarks, which is one of the indicators the ATO use in activity reviews.
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