On Thursday 3 November 2022, the ATO announced draft changes to the work from home expense claim methods.

Note: The draft Practical compliance guideline (PCG) released, outlines a new method called the revised fixed rate method for claiming a deduction for working from home expenses in 2022-23, so we expect some of this information below may be revised. Find out what this could mean for your 2022-23 individual tax return.

What are the key changes proposed?

The most notable change impacting Australia taxpayers looking to claim on their work from home expenses is the introduction of the new fixed rate method used to calculate tax deductions, which will also be replacing the previous shortcut method.

What does that look like in a snapshot?

  • A NEW $0.67 cent fixed rate method has been introduced with significant changes to what you can and can’t claim as well as extra record keeping requirements.
  • The existing $0.52 cent fixed rate method has been revised and will not be available for use in 2022-23.
  • Shortcut method of $0.80 cent per hour has ended (i.e., it can’t be used to calculate a deduction for 2022-23) and the existing fixed rate deduction method has been revised.
  • New method of claiming expenses and deductions

The revised fixed rate method provides a $0.67 cent deduction for each hour worked from home.* Further details on expenses and deductions are included below.

This rate per hour covers expenses included in the revised fixed rate:

  • Data and internet
  • Mobile and home phone usage
  • Electricity and gas
  • Computer consumables (printer ink)
  • Stationery

*What is very important to note, is that you won’t to eligible to claim a separate deduction for any expenses included in the revised fixed rate method.

However, you can claim a separate deduction for:

  • The decline in value of assets used while working from home, such as technology and office furniture, as well as any repairs and maintenance of these items
  • Other working expenses you incur as a result of working from home which are not covered by the rate per hour

What records do you need to claim work from home expenses?

Additional record keeping and evidence requirements have been set down by the ATO for those who wish to use this new method. To claim working from home expenses using the revised fixed rate method, you will need the following records:

  • A record of all the hours you work from home for the entire year (timesheet, roster, diary). Note that for 2022-23 a transitional timekeeping arrangement is available
  • Evidence you paid for the expenses covered by the revised fixed rate method (for example, if you use your phone and electricity when you work from home, keep one bill for each of these expenses)

These are proposed changes which you should be aware of.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au , or arrange a time for a meeting so we can discuss your requirements in more detail.

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