New Home Office Guidelines released by the ATO
With more and more people working from home, the ATO has announced a temporary short cut method to make it easier for individual taxpayers to claim deductions for additional ‘at-home’ running expenses (please refer to the ATO’s Media Release of 7 April 2020).
During the period 1 March 2020 to 30 June 2020, the ATO will allow individuals to claim a deduction for all running expenses, based on a rate of 80 cents for each hour an individual carries out genuine work duties from home. The key difference is that this alternative arrangement will not require an analysis of specific running expenses or onerous record-keeping
ATO’s 80 cents per hour method covers all running costs
The 80 cents per hour method is designed to cover all deductible running expenses associated with working from home, including the following:
Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work
Cleaning costs for a dedicated work area
Phone and internet expenses
Computer consumables (e.g., printer paper and ink) and stationery
Depreciation of home office furniture and furnishings (e.g., an office desk and a chair)
Depreciation of home office equipment (e.g., a computer and a printer).
However it also meant that, under the 80 cents per hour method, separate claims cannot be made for any of the above running expenses (including depreciation of work-related furniture and equipment).
Other noteworthy points in the ATO’s announcement were:
(a) there is no requirement to have a separate or dedicated area at home set aside for working (e.g., a private study);
(b) multiple people living in the same house could claim under this method (e.g., a couple living together could each individually claim running expenses they have incurred while genuinely working from home, based on the 80 cents per hour method); and
(c) an individual will only be required to keep a record of the number of hours worked from home as a result of the Coronavirus, during the above period. This record can include time sheets, diary entries/notes or even rosters.