BRIBIE ACCOUNTING SERVICES

TAX TIPS – CHANGING HOME OFFICE RULES

The ATO has just changed the way to claim home office expenses and you need to be prepared.

If you work from home you can claim actual costs or a revised fixed rate method. Fixed rate method of 67c per hour – this is a set rate and includes all other office expenses – no claiming phone, internet, stationery separately with this method anymore. The ATO needs hours logged for four consecutive weeks between 1 July 2022 to 31 December 2022 and full daily records from 1 January onwards. Actual costs – you must keep a dairy for four weeks that tracks your usual pattern and can claim a portion of phone, internet, electricity portion if in a dedicated area, stationery and computer consumables – you must have all invoices. While the old method of claiming cents per hour plus phone/internet used to be more favourable, it is highly likely the actual method is going to come out on top, depending on your individual circumstances.

The industries with the lowest probability of default over the next 12 months are:

1. Health Care and Social Assistance: 3.26%

2. Agriculture, Forestry and Fishing: 3.50%

3. Wholesale Trade: 3.59% Source: CreditorWatch risk score credit rating average probability of default by industry

Outlook

The outlook for 2023 has worsened upon the most recent increase to the cash rate which, while expected, was coupled with a very downbeat tone by the RBA in its accompanying statement and included an expectation of further Increases to the cash rate.

While many individuals and businesses had priced in at least one further rise to the cash rate, two more will present real serviceability problems to small businesses, particularly those in areas and sectors where demand is likely to drop, or already dropping.