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ATO Targeting Work-From-Home Expenses this Tax Time

Working From Home

The Tax Office has earmarked home office expenses as a key focus area this tax time, citing a lack of education contributing to a high amount of mistakes, errors, and questionable claims.

According to the ATO a record $7.9 billion in deductions for ‘other work-related expenses’ were claimed by 6.7 million taxpayers last year, with the Tax Office noticing a rise in expenses related to working from home. With increasing numbers of employees working from home, extra costs related to home office could be deductible, but the ATO advise they are seeing some taxpayers either over-claiming and/or claiming private expenses which are not tax deductible.

They cite increasing evidence that many taxpayers don’t know what they can and cannot claim. In particular, they are seeing some taxpayers claiming expenses they never paid for, expenses their employer reimbursed, private expenses and expenses with no supporting records. While acknowledging that costs incurred as a direct result of working from home can be legitimately claimed, the ATO have noticed taxpayers making claims for all sorts of private expenses.

Apparently a very common issue is people claiming the entire amount of an expense (like their internet or mobile phone), not just the extra part related to their work. An ATO spokesperson advises “If working from home means sitting in front of the TV or at the kitchen table doing some emails, it’s unlikely that you are incurring any additional expenses. However, if you have a separate work area, then you can claim the work-related portion of running expenses for that space. Employees cannot generally claim occupancy-related expenses like rent, mortgage repayments, property insurance, land taxes and rates.”

The ATO have revealed that over $53 million in errors had been corrected in the first two months of tax time in 2018, stemming from “simple mistakes” such as not declaring all income or over-claiming deductions. If you are unsure about what you might be able to claim please contact our office to discuss further.

Federal Budget 2019 - How will it impact you and your business?

The Federal Budget has been delivered and has focused on infrastructure and essential services spending as well as income tax relief for low and middle income earners and business tax relief. Unsurprisingly (on the eve of a federal election), the budget is a somewhat safe and uneventful one, and rather than containing any major changes to the current tax base, has focused on minor tweaks and changes to what we already have.

As with all Budgets, these are announcements only and have not been legislated. The details are still to be worked through, and both Houses of Parliament need to pass legislation before the announcements take effect. Parliament won’t consider these announcements until after the Federal election, expected in May this year, so more than normal, the passage from announcement to legislation is uncertain.

The key tax (personal and business related) and superannuation highlights of last night’s Budget are summarised below:-

Fringe Benefits Tax (“FBT”)

FBT

The FBT year ends on 31 March 2019 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists, an annual return is required to be lodged and any tax paid by 21 May 2019. However, if the return is lodged electronically by a Tax Agent the due date of lodgement is 25 June 2019 while the payment due date is 28 May 2019.

July 2019 Newsletter

WELCOME

Welcome to our July 2019 edition of the StewartBrown newsletter. We hope to keep you informed of the important tax developments and issues affecting businesses in Australia today.

Managing Prudential Risk in Residential Aged Care Submission March 2019

In February 2019, The Australian Department of Health (the Department) released the discussion paper “Managing Prudential Risk in Residential Aged Care” in consultation with the residential aged care sector and the broader community on the issue of managing prudential risk in residential aged care.

The existing framework in place under the Aged Care Act 1997 (the Act) supports this objective, however two recent reviews have recommended that the prudential framework be strengthened (Ernst and Young and the Tune Review).

The Department has invited submissions from all interested stakeholders to gather the sector’s views on the options for better managing prudential risk in residential aged care.

Please see below for the StewartBrown submission on managing prudential risk in residential aged care.

News

Articles and news, including tax, aged care, financial and accounting articles.

November 2017 Newsletter

We hope to keep you informed of the important tax developments and issues affecting businesses in Australia today and throughout the year ahead.

Royal Commission into Aged Care Quality and Safety

Aged Care

On 16 September the Prime Minister announced the establishment of a Royal Commission into the aged care sector. Consultation is underway until 25 September to develop the Terms of Reference, which the Government anticipates will include:

Security Alert: BSB & Account Number Changes

Scam Alert

If you are ever asked to change or update a BSB and Account number as a result of an email received from a supplier or known associate, it is critical that you verbally validate this request as well.

Reports to the Australian Competition and Consumer Commission (ACCC) and Australian Cybercrime Online Reporting Network (ACORN) about scams of this sort have exposed over $22.1 million in funds being transferred from businesses to scammer accounts during 2017.

Our top tips to avoid incurring financial loss to scammers are:

  1. Always verbally check the BSB and Account number changes using a trusted phone number. Confirming a change via email is not a secure method of validation.
  2. Scammers often pose as executive staff members to direct employees to make urgent payments. Once again, always verbally validate these requests using a trusted phone number.
  3. If you are unable to contact the requestor, contact the recipient bank to confirm if the BSB and Account number match the name on the account.

For more information on how to protect your business speak to your StewartBrown Partner of Manager and/or contact your bank.

This threat is real and should not be taken lightly! A client of our firm recently experienced this scam and unfortunately lost out financially because of it. Be vigilant and train your staff to be on the alert.

StewartBrown Newsletter August 2017

Welcome to our August 2017 edition of the StewartBrown newsletter. We hope to keep you informed of the important tax developments and issues affecting businesses in Australia today and throughout the year ahead.

Tax Policies Of The Major Political Parties

In our May 2018 special edition newsletter, we discussed the tax policies of the major political parties in Australia at that time. This was back when newspapers and online media were fervently covering the major issue being proposed by the Labor party; that of cancelling tax refunds arising from excess imputation (or franking) credits.

As the Federal election is drawing ever nearer (and the prospect of a change in Government seems ever more likely!) we thought that we should revisit some of the more significant policy proposals as some of you may be substantially affected by them if they become law (and could apply from 1 July this year!)

Bob Deutsch Senior Tax Counsel of the Taxation Institute of Australia recently said “The next Federal election is looming as one of the most important elections in recent times particularly having regard to the differences between the two alternatives on tax policy.”

We have summarised the major parties tax policies for you and given some brief explanations in each of the following links:

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