902 Howitt Street, Wendouree VIC 3355
PO Box 103W, Ballarat West VIC 3350
admin@cluffaccountants.com.au
03 5333 3125
Blog Layout
'WORK FROM HOME' Tax Deductions
May 7, 2021
Following on from the 2020 financial year when a simplified calculation for working from home expenses could be claimed as a tax deduction, the 2021 financial year will see similar deductions.
As a reminder, the taxpayer has three options to claim working from home costs as follows:
- claim a rate of 80 cents per work hour for all additional running expenses. This is known as the “short cut method”.
- claim a rate of 52 cents per work hour for heating, cooling, lighting, cleaning, and the decline in value of office furniture, plus calculate the work-related portion of phone and internet expenses, computer consumables, stationery, and the decline in value of a computer, laptop, or similar device.
- claim the actual work-related portion of all running expenses, which taxpayers need to calculate on a reasonable basis.
Expenses include the following:
- electricity expenses associated with heating, cooling, and lighting the area from which they are working and running items they are using for work.
- cleaning costs for a dedicated work area.
- phone and internet expenses.
- computer consumables (for example, printer paper and ink) and stationery.
- home office equipment, including computers, printers, phones, furniture, and furnishings; you can claim either the:
- decline in value (depreciation) for items over $300
It is important that the taxpayer has incurred the expense themselves for work purposes, they have not been reimbursed by their employer and that they are able to substantiate the expenses with a receipt.
The City of Ballarat is offering Ballarat businesses and community groups some financial relief under the “Community and Business Support Package” Business may be eligible to receive a one-off grant of $500 and community groups receive $250. To qualify, the applicant must evidence a turnover reduction of at least 30% over a four-week period since 27 May 2021, have an ABN and a payroll of less than $1m. In addition, the business must operate within the City of Ballarat municipal boundary. Applications are now open and can be accessed here https://www.ballarat.vic.gov.au/supportpackage
The Federal Government is establishing a new Australian Business Registry Services (ABRS) to unify ASIC’s 31 business registers to be administered by the Australian Taxation Office. Director Identification Numbers will be the first new function of the ABRS, and this requirement will be a new requirement for all company directors. The director DIN will be a unique identifier which will identify the director forever, and the director will retain it even if they cease to be a director, change names or move overseas or interstate. The practice if Illegal phoenixing, i.e. moving a company’s business from one entity to another without paying outstanding liabilities, will be a major focus of the new DIN process, and will assist to identify those dishonest directors who are doing the wrong thing. According to the ATO website, directors don’t currently need to do anything, but the ATO said it will soon begin testing the new application process to deliver the registrations. When it’s time to apply, the ATO said directors will be able to use ABRS online services and will sign in using the myGovID app.
From 1 July 2021, small employers with closely held payees will need to report their closely held payees through Single Touch Payroll (STP). ATO concessions for these employers will cease, and from that date the new STP rules will apply. Closely held payees are defined as someone who is directly related to the entity that they receive payments from and include family members, company directors and beneficiaries of a trust. There are limited options regarding the reporting including reporting actual payments when they are made, and in some cases, quarterly reporting with a reasonable estimate. The Small Business Digital Adaptation Grant through the Victorian State Government may provide a grant up to $1200 in some circumstances may assist some employers to access digital products including accounting software. This may assist some employers to find a solution to STP compliance.
Liability limited by a scheme approved under Professional Standards Legislation.