The temporary shortcut method for calculating home office expenses has now been extended to 31 December 2020, after it was due to expire at the end of September.
Taxpayers have been able to apply the 80 cents per hour method since March, after the ATO introduced the temporary method in light of COVID-19 restrictions forcing many workers to adopt remote working practices.
The extension comes as most workers in metropolitan Melbourne continue to be barred from returning to their workplace as the Victorian government works through its reopening roadmap.
The ATO’s updated Practical Compliance Guideline 2020/3 notes that the 31 December end date will be revisited and may be further extended.
Tax & Super Australia tax counsel John Jeffreys welcomed the extension but urged taxpayers to ensure they were not accidentally double dipping on other working-from-home expenses.
“Employees working from home should note that if they use the ATO’s shortcut method for home office expenses, they can’t claim other home office-related items, such as technology, desks, monitors and chairs. It’s a one or the other approach. Some may be mistaken about this,” Mr Jeffreys said.
“Finally, when the ATO outlined its shortcut method, it noted that taxpayers should keep adequate records — diary notes, timesheets or rosters — to substantiate work.
“It’s unlikely the ATO would audit this, but it’s worth employees having this evidence just in case. It could be that significantly higher claim by an employee compared to benchmark claims for same hours worked would be a red flag to the ATO.”
The temporary shortcut method will continue to be supplementary to the 52 cents fixed rate method and the actual cost method of calculating running expenses, with taxpayers able to choose the appropriate method for their circumstances.
View the ATO’s updated PCG 2020/3 here.
30 September 2020
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