The ATO announced on 7th April 2020 that they are allowing taxpayers to claim 80 cents per hour for all their running expenses while working from home.
These expenses would include heating, cooling, lighting, depreciation of office furniture, phone and internet expenses, computer consumables, stationery and depreciation for a computer laptop or similar device.
This new arrangement will apply from 1 March 2020 to 30 June 2020 and will be reviewed after this date if required. All you need to do is keep a record of your hours worked as evidence for the ATO.
Multiple people living in the same house will each be able to claim 80 cents per hour for the number of hours they are working from home.
You will still be able to claim using existing working from home calculations, as detailed further down in this alert, if you choose to.
The ATO are also reminding everyone that the 3 rules for deductions still apply:
you must have spent the money and not been reimbursed
the claim must be directly related to earning income
there must be a record to substantiate the claim
Working from Home: What can I Claim?
If you are an employee and are now required to work from home, you may be able to claim extra deductions for the expenses you are incurring.
The items detailed below are expenses you may be able to claim if your home is not your principal place of business.
If you have a work area like a study or spare room set aside for doing your work you are able to claim the following expenses:
The electricity and/or gas used when working in the room
Cleaning expenses for the room
Work related phone calls and internet expenses
Depreciation of office equipment such as desks, chairs and computers
Computer consumables including printer paper, ink and stationery
You may also be able to claim some of the above expenses where you don’t have a set work area but you are working at the dining table.
Only the portion of expenses incurred as a result of working from home are deductible.
If you are working from home as an employee and claim working from home expenses there will be no capital gains tax implications for your home.
In order to claim these expenses you need to be able prove the amount that was used for work-related purposes.
You can claim a fixed rate of 52 cents per hour for each hour you work from home instead of recording all of your actual expenses for electricity, gas & the depreciation of furniture. To do this you would need to keep track of how many hours you have worked at home. You can also keep a four week diary that sets up a pattern of working from home for the period you are required to work from home.
By keeping track of the actual hours you have worked from home you can use this information to calculate the percentage of actual costs you have incurred. We would also need to know the area of your dedicated work space divided by the whole area of your house to help with calculation of the percentage of business use for some expense claims.
If you keep no records of your phone and internet expenses you are limited to a claim of up to $50 for each. In order to claim the actual work related expenses, you are required to keep records for a four week representative period. If you have a bundled plan you need to apportion the cost of the plan between the different services provided.
You must be able to provide receipts for any office equipment or consumables you wish to claim.
You must also take into account if any other members of your household use the dedicated office and if they do, the expenses must be apportioned.
For more information, click the link below for a fact sheet from the ATO about employees working from home.
https://www.ato.gov.au/uploadedFiles/Content/IND/Downloads/Working-from-home.pdf
If you have any questions about the above information, please do not hesitate to contact us.