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Temporary home office expenses shortcut extended again

The 80 cents per hour work-from-home deduction method has now been extended for a further three months to the end of the year.

   

The temporary shortcut method for calculating home office expenses has now been extended to 31 December 2020, after it was due to expire at the end of September.

Taxpayers have been able to apply the 80 cents per hour method since March, after the ATO introduced the temporary method in light of COVID-19 restrictions forcing many workers to adopt remote working practices.

The extension comes as most workers in metropolitan Melbourne continue to be barred from returning to their workplace as the Victorian government works through its reopening roadmap.

The ATO’s updated Practical Compliance Guideline 2020/3 notes that the 31 December end date will be revisited and may be further extended.

Tax &  Super Australia tax counsel John Jeffreys welcomed the extension but urged taxpayers to ensure they were not accidentally double dipping on other working-from-home expenses.

“Employees working from home should note that if they use the ATO’s shortcut method for home office expenses, they can’t claim other home office-related items, such as technology, desks, monitors and chairs. It’s a one or the other approach. Some may be mistaken about this,” Mr Jeffreys said.

“Finally, when the ATO outlined its shortcut method, it noted that taxpayers should keep adequate records — diary notes, timesheets or rosters — to substantiate work.

“It’s unlikely the ATO would audit this, but it’s worth employees having this evidence just in case. It could be that significantly higher claim by an employee compared to benchmark claims for same hours worked would be a red flag to the ATO.”

The temporary shortcut method will continue to be supplementary to the 52 cents fixed rate method and the actual cost method of calculating running expenses, with taxpayers able to choose the appropriate method for their circumstances.

View the ATO’s updated PCG 2020/3 here.

 

 

Jotham Lian 
30 September 2020
accountantsdaily.com.au


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David has been in the Financial Services Industry for nearly 30 years. He was one of the founding Directors of the successful Financial Planning and Stockbroking Practice, Henderson Gregory Forrest, for a decade. Prior to that, he held senior roles in companies such as ING, KPMG Accountants and AMP. David was previously Chairman of OAMPS Superannuation Trustee Board and currently serves as an independent Board Director for several companies.

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Michelle’s career has spanned across the Financial Services, Retirement Living and Aged Care industries working in the private sector, not for profit and more recently with the state government for over 20 years. Her experience extends to many facets of the financial services industry, having worked in superannuation administration, technical support and financial planning practice administration.

Commencing with AMP and subsequently working in commerce and accounting roles with companies such as Brambles, Adelaide Bank Retirement Services, ECH Inc and SA Health and Wellbeing, Michelle returns to financial services after working in practice financial management at Henderson Gregory Forrest. This wide range of experience from senior accounting and management roles has provided Michelle with a strong background in business administration.

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