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The recent extension of the work-from-home shortcut method is set to put additional pressure on the ATO as citizens continue to seek out remote arrangements beyond this financial year.
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Shortcut method extension to accelerate pressure on ATO
10 November 2021
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12 minute read
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Last month, the ATO confirmed it had extended the deduction shortcut until 30 June 2022 in response to “continued extenuating circumstances of COVID-19” and further lockdowns.
This will see taxpayers able to claim the 80¢ per hour temporary shortcut method to calculate working-from-home deductions.
Speaking on the latest episode of Accountants Daily Insider, Michael Croker, tax leader at Chartered Accountants Australia and New Zealand (CA ANZ), said the extension was a welcome one for both employers and employees alike.
“Well, it’s good for the employee. It’s a relatively simple method, although it does come with some obligations to make sure you can somehow prove that you were working from home that day,” Mr Croker said.
“But it’s also good for employers who can say, ‘Look, we’ve asked you to work from home. Here’s a shortcut easy method if you want to try and claim some deductions’. So it was a win-win for the boss and for the employee, but only for up until 30 June, 2022, it seems.”
While the extension only covers this financial year, Mr Croker said he expects the ATO will have to implement a permanent method that looks beyond 30 June.
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Changing work expectations from employees, coupled with employers implementing greater flexible arrangements than ever before, will prompt greater pressure, he said.
“A lot of employers are doing surveys saying, ‘How do you want to work into the future?’ And a lot of those survey results are saying, ‘Oh, we’d like to still work from home a little bit. We know you want us back in the office now and again, but how about three days versus two days, that sort of stuff?’” Mr Croker said.
“So there will be a trend, we think, a permanent trend to work from home. And of course, that brings with it pressure on the ATO to perhaps reign in some of these deduction claims because this is a really hard deduction for the ATO to prove.
“[For example], do you have an area in your home that’s set aside for work use? Are you keeping records of the time you actually spent at home? Is it really work related or does your partner or your kids, do they also play on all these gadgets that you say you use for work purposes?
“So it’s a tough one for the ATO. I suspect that the ATO has been long concerned about the rising nature of work-related deductions and they see this trend and say, ‘We’ve got to be a bit more careful here’.”
To listen to the full episode featuring Mr Croker, click here.
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