Doubling Tax Refunds for a Sole Trader Medical Practitioner

Introduction: 
Our client, a sole trader medical practitioner, used Cliniko to manage her practice but struggled to optimise her tax returns. With a demanding schedule, she lacked the time to track deductions, reconcile income correctly, or adjust her tax planning. As a result, she missed key deductions, accidentally double-counted income, and faced cash flow issues due to misaligned PAYG instalments. Despite her busy schedule, she knew there was room for improvement in her tax strategy but didn’t have the time or expertise to address it. 

Our Approach: 
To optimise Emily’s tax position, we implemented a three-step approach: 

1. Identifying Unclaimed Deductions & Correcting Income Reporting – By reconciling her Cliniko records with bank statements, we uncovered hidden transaction fees charged by payment processors that had gone unnoticed. She also regularly incurred work-related travel costs but had lost some invoices, leading her to believe she couldn’t claim them. We applied the record keeping exception, which allows eligible travel expenses to be claimed without needing receipts, ensuring she didn’t miss out on legitimate deductions. Additionally, we corrected double-counting errors in her income reporting, aligning her taxable income with the correct accounting method. 

2. Educating on Record-Keeping & Compliance – We addressed the who, what, when, where, and why of maintaining a travel diary, ensuring she understood its importance in substantiating work-related travel expenses. We clarified who needs to keep a travel diary, what details must be recorded, when it is required for tax purposes, where it applies in different travel scenarios, and why it plays a critical role in supporting deductions. To make record-keeping effortless, we provided a structured travel diary template and practical guidance on maintaining accurate travel logs. Additionally, we introduced Dext and Xero to automate expense tracking, reducing manual effort and minimising the risk of missing deductible expenses. 

3. Strategic Planning for Cash Flow & Tax Efficiency – Her PAYG instalments had not been varied to reflect changes in her business income, leading to unnecessary cash flow strain. We adjusted her PAYGI payments to better align with actual earnings, optimising cash flow while ensuring compliance.  

The Results 
With these optimisations, our client’s tax refund has doubled. More importantly, she gained clarity on her tax position and confidence in managing her finances effectively. 

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