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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.

Employer Financial Subsidies Available - Check Your Eligibility

Employer Subsidies

A wage subsidy is a financial incentive of up to $10,000 (GST inclusive) to help eligible businesses hire new staff.

Employers can access a wage subsidy if they:

  • have an Australian Business Number (ABN)
  • have not previously received a wage subsidy for the same person
  • are not an Australian, state or territory government agency
  • offer a job that is expected to be ongoing and for an average of 20 hours per week over the six months of the wage subsidy agreement
  • offer a job that complies with employment standards for the position - for example, is suitable work and pays as a minimum the national award wage.

Employers can access a wage subsidy if they:

  • work that displaces an existing employee
  • commission-based, subcontracting or self-employment positions and
  • work for an immediate family member.

Employment service providers will make flexible payments to eligible employers over six months. Employees who are Indigenous Australians have immediate access to wage subsidies of up to $10,000 if all eligibility requirements are met. The following table summarises what subsidies are available to employers:

Wage subsidy type Eligible age range Subsidy available
Restart 50 years of age and over Up to $10,000
Youth Bonus 15-24 years of age Up to $10,000
Youth 25-29 years of age Up to $6,500
Parents Any age Up to $6,500
Long Term Unemployed Any age Up to $6,500

Wage subsidies are available to eligible participants in jobactive, Transition to Work (TtW) and ParentsNext Intensive Streams. The Restart Wage Subsidy is also available to participants in Disability Employment Services (DES) and the Community Development Programme (CDP).

All wage subsidy placements must average at least 20 hours per week over the 26 week wage subsidy period. Employment must also comply with National Employment Standards.

Jobs can be full time, part time or casual. Apprenticeships and traineeships are also eligible to attract a wage subsidy.

Each wage subsidy is targeted to assist those who need it most. Please talk to an employment services provider to check your eligibility. A list of employment services providers can be found at: www.jobsearch.gov.au/service-providers or by calling the Jobseeker Hotline on 13 62 68 or the National Customer Service Line on 1800 805 260.

February 2018 Newsletter - Land Tax

Welcome to the special Land Tax edition of our client newsletter for 2018 where we hope to keep you informed of the important land tax compliance issues affecting owners of land in Australia.

February 2018 Newsletter - Single Touch Payroll & Downsizing Super Contributions

Welcome to our February 2018 edition of the StewartBrown newsletter. We hope to keep you informed of the important tax developments and issues affecting businesses in Australia today. In this issue we bring you two important articles; the first being a reminder about the Single Touch Payroll system that soon becomes mandatory and secondly a new Government initiative aimed at reducing some pressure on housing affordability.

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.

May 2018 Newsletter - Tax policies of major political parties

You may have read a lot in the media recently about the different tax policies and proposals coming out of the major Australian political parties. To help you understand these policies and potentially the tax changes that are coming, we thought you’d appreciate a summary and brief explanation of them to be better informed for the future.

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.

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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Adelaide Office

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