Tips for business owners claiming work from home expenses during Covid-19

It's really been a new phenomenon, there's been a huge change for most people in that they have been thrust into working from home when traditionally you go to your office, you do your work, and then come home. The covid-19 crisis basically sent everybody home for 2-3 months and people were working on the kitchen benches, or from their studies, the challenges of home schooling, juggling all of that, so now that the kids are going back to school and now we're working a little bit more efficiently from home.

The first thing business owners need to do is keep records for all of the money that we spend on decking out your home office. Business Owners operating a business can claim things like a portion of occupancy expenses such as:

  • Rent and mortgage repayments
  • Rates
  • Land taxes
  • Heating, cooling and lighting.
  • Phone & Internet

For employees working from home; the rules are different. The way that the government legislation has come out at the moment is the ATO has set an “Shortcut Method”; which is an hourly rate based upon the hours that you're working from home and I believe numbers $0.80 per hour that you're working from home. Employees cannot claim occupancy expenses but the hourly rate accounts for a claim for running costs of your home office.

The main thing that you will be able to do to help claim better is to keep all of your receipts, to keep all of your information, create a spreadsheet for yourself, enter it into your cloud accounting package, put them all in a box, make sure you give it to your accountant, or whoever handles your tax returns records in good time and only one place so that you can basically get your portion of the benefits sooner rather than later when it comes to tax time.

You might have gone and bought home office equipment; you might have bought a printer you might have bought a new mobile phone, I'd also say that you can depreciate some of those items to a proportion so you'll need to work closely with your tax advisors during this time in lodging the next return to get the maximum benefit out there.

There is also a small window of opportunity now that if you were thinking of buying something new for your home office, we might have seen that the investment allowance, there's much talk of that it’s been extended and Investment Allowance so much for people who are working from home they may not need to spend $150,000 certainly not for a home office but the opportunity is there for people working from home that if you're labouring on with an old laptop, and you can afford it; buy yourself a new laptop let's get that tax deduction before the 30th June, if your phone is old, go over and upgrade it, if you're working on your ironing board, buy yourself a new ironing board! Make sure you're working as efficiently as possible from home, in business for yourself or for your employer and you'll be able to then to submit those receipts as well to your tax advisor when it comes to putting in your tax returns to help.

The only thing you’ll need to clarify that point in time is for any of those purchases whether or not they have a private element as well as a business element and if they do have a private element we won't be coming 100% of the expense it will certainly be claiming a proportion that could be linked back to the work that you do from Home.