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Businesses reminded of extension of shortcut WFH deduction method

Adrian Flores
Adrian Flores
29 October 2020 1 minute readShare
extension of shortcut WFH deduction method

The Tax Office has reminded businesses that they have an extension on using the “shortcut” method to calculate working-from-home expenses due to the continuing COVID-19 situation as another critical deadline looms for taxpayers. 

Businesses have been reminded that due to the current work-from-home situation in relation to COVID-19, it has extended the 80 cents per hour “shortcut method” to calculate WFH expenses until 31 December 2020.

The ATO reminded taxpayers wishing to use this method to calculate their WFH expenses should keep a record of the number of hours they work from home.

“We’ve also been asking people to be aware of how their work-related expenses might be different this year. Of course, as expected, we’ve seen more people than ever make claims for working-from-home expenses,” ATO assistant commissioner Karen Foat said.

“Unfortunately, we are seeing a small number of people not taking care to adjust their claims to their altered circumstances or making claims without sufficient evidence.

“Not being able to support your claim, if asked, may delay your refund and result in a penalty in the most serious cases.”

The ATO has also reminded individuals that they have less than a week to lodge their own tax return. The deadline is usually 31 October, but because the date falls on a weekend this year, the actual deadline is the next business day, which is 2 November.

Ms Foat said that some individuals are yet to lodge. Further, she said if businesses are putting off their taxes because of a potential debt, they should not worry.

“You still need to lodge your tax returns on time if you can, even if you can’t pay by the due date. This will show us that you’re aware of your obligations and doing your best to meet them. Once we understand your situation, we can discuss whether a deferral or a payment plan is best for you,” Ms Foat said.

“If you plan to lodge with a tax agent, you may have a later lodgement date, but it’s important to contact your agent and get on their books now. Remember, the earlier you seek help, the easier it will be to get back on track.

“If your circumstances change, you can suspend, vary or cancel your payment plan. We will also make sure you are not charged interest on the outstanding debt while you are affected by COVID-19.”

Businesses reminded of extension of shortcut WFH deduction method
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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