I run my own business which gives me a bit of flexibility of how/where I pay bills. Unfortunately, most of my business expenses are wages and interest so can’t earn points on those but I could on GST and PAYG payments to the ATO which equate to around $200k p.a.
Personal expenses on credit cards are probably circa $7-8k / month plus another $60k p.a. in ATO payments. I don’t regularly fly for work.
I haven’t previously had a strategy for earning points so am just starting to look for a new credit card(s). Should I just put all expenses through a personal card (and reimburse expenses from my business) or vice versa (or alternatively run two separate rewards accounts, one for business and one for personal)?
Great question. There are a few considerations:
- Cards that will provide best points return, and Personal vs Business cards for large volume of Business expenses
- Banks / cards that your accountants are most happy to work with
- Tax deductibility of annual fees
- Effective points earn for ATO spend
On 1, some banks have been known to exclude large volumes of Business expenses being run through personal cards as being appropriate within their terms and conditions. Accounts have been shut down (ANZ comes to mind as one who were in the news recently). Given your work expense volume you probably want to be sure you’re going for an appropriate card.
That said many business cards are assessed and issued under the name of the account holder, not the business. In terms of options, have a look at the Business Cards section at the bottom of the page here.
On 2., obviously check with your accountants as well, but I am finding that mine don’t mind which kind of credit card I put my expenses on and are happy to work with me for the right card for the right means. Yours might prefer a specific set up, I don’t know. Not that should dictate how you run your finances but it’s still a consideration if it adds admin overhead.
On 3., this matters most for the high annual fee cards out there - my understanding is that fees are tax deductible only for when the card is used exclusively for business expenses.
On 4., this is a topic that is ever changing as ATO earn has been reduced a lot in the last 6-12 months. There are very few cards left which allow points earn with ATO, especially uncapped. How a bank would determine if a personal card was being used for business ATO spend I don’t know, given you can do personal ATO spend as well, but I guess that would be based on volume.Anyway, some info on cards which currently pay out or not on ATO can be found here.
Thanks Keith. Amex have suggested I go with a Platinum Business Card which comes with a free Platinum Reserve Card for personal use. Both cards will earn points in the Ascent Premium program. I was told the Reserve Card is no longer publicly available but earns the same 3,2,1,0.5 points as per the Platinum Edge.
Having the card fee being tax deductible (since it applies purely to the business card) is attractive and I get the 100,000 points on signup plus the free domestic flight etc.