Are you Working from Home?

keep records “as they occur” as “timesheets, rosters, logs of time spent accessing employer or business systems, or a diary for the full year”.

Not only will taxpayers need to keep a detailed record throughout the whole financial year of the hours they have worked from home, but they must also keep a copy o their utility bills, phone, internet, stationary and computer consumables e.g. paper and ink for the printer.

It is believed that if a taxpayer is audited in the future, they will have to justify that their working from home costs were incurred. The ATO wants to see an increase in costs to justify the claim being made.

The fixed rate method will still allow a separate claim to be made for depreciation of computers and office furniture, which was not allowed under the fixed rate method during COVID. Other items like repairs, cleaning and maintenance can also be claimed separately.

Those claiming 67c an hour will also need to keep bills for costs included in the fixed rate, which covers electricity, gas, phone, the internet, stationery and computer consumables. The threshold cost for depreciation of an asset remains at $300.

What has changed is that those working from home do not now need to have a dedicated home office to claim WFH expenses, which was a requirement in past years. The ATO believes this will be a boon for taxpayers.

However, Assistant Commissioner Tim

Loh warned that taxpayers “carrying out minimal tasks, such as occasionally checking emails or taking calls” were ineligible to claim because “you must be working from home to fulfil your employment duties”. So, if you are doing work from home but it was not a requirement by your employer to do so or there was no arrangement in place to carry out those work duties from home, then you will be ineligible to claim future WFH expenses.

Mr Loh said the ATO would accept a representative record of hours worked from home for the period 1 July 2022 to 28 February 2023, but after that “taxpayers will need to record the total number of hours they work from home”. “And remember, you can’t claim for things like coffee, tea, milk and other general household items, even if your employer may provide these kinds of things for you at work.”

What does this mean for tax agents and accountants who prepare tax returns? It is likely the tax agent or accountant will be asking the client to verify their WFH expenses. This will initial cause friction between the taxpayer and their accountant/tax agent, but as the saying goes, ‘don’t shoot the messenger’. We encourage everyone to work with their accountants/tax agents where further information has been requested of the taxpayer to substantiate their WFH claims.

Warren Strybosch

You can call them on 1300 88 38 30 or email info@findaccountant.com.au