First introduced as part of the pandemic support programs for individuals, the Australian Tax Office intends to conclude the use of their ‘shortcut’ and ‘fixed-rate’ work-from-home expense calculating methods, instead announcing a new combined methodology.
Under the new method, individuals will be able to claim 67 cents per hour for work-from-home expenses as part of the ‘new fixed rate allowance’, compared to the previous 80 cent and 52 cent amounts respectively.
In revising the allowance, the ATO has extended the expenses able to be claimed to include energy, internet, and mobile costs, as well as those incurred for stationery and computer consumables. These “new” allowable expenses will match deductions able to be claimed outside of working from home.
It is important to note that “workplace staples” such as milk, tea, and coffees (which can be typically supplied by employers at work) cannot be claimed as a tax deduction while working from home.
Should the new ATO guidance receive finalisation, the revised ‘fixed-rate’ method will be available from 1 July 2022 and allows for claims for the actual decline in value for the depreciating assets used while working from home (such as computers, desks, or office chairs).
To claim the concession, you must have a record of the hours worked from home (timesheet or diary note) and does not require a separate or dedicated ‘home office’/study to be used.
The ‘actual cost method’ calculation will continue be available to individuals in order to claim the actual work-related portion of all running expenses.
Whilst unique to the situation, we generally recommend use of the method that best suits your individual circumstances and potentially yields the highest tax deduction.
Should you have any questions in relation to the proposed new methodology and the personal tax concessions available to you, please contact the Archer Gowland Redshaw office on (07) 3002 2699 | info@agredshaw.com.au.
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