Working from Home – What Tax Deductions can I Claim

With more and more people isolating and working from home during the current crisis (some experiencing working from home for the first time), a question being asked is “what can I claim as a tax deduction if I have to work from home?”

If you’re an employee and temporarily work from home due to recent events, such as COVID-19 (coronavirus), bush fire and drought, you may be able to claim a deduction for expenses you incur relating to that work.

You may be able to claim a deduction for additional running expenses you incur such as heating, cooling and lighting. You can also claim the work-related proportion of the decline in value of office equipment.

Employees are generally not able to claim occupancy expenses. Occupancy expenses include:

  • rent
  • mortgage interest
  • property insurance
  • land taxes
  • rates.

However, you can only claim the work-related proportion of your occupancy expenses in two very limited circumstances which are a bit complex to explain here so we suggest you contact Balanix Solutions on 07 3264 4783 for more detail.

In most cases, there are no capital gains tax (CGT) implications for your home if you work from home as an employee and claim working from home expenses

It is strongly recommended that you always keep receipts for expenditure and how you calculated the claim you have made.

Click Here for the Australian Taxation Office information relating to Employees Working from Home.

Please contact Balanix Solutions on 07 3264 4783 if you require assistance in this matter.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

Job Keeper Payments

The Australian Federal Government announced today the JobKeeper payment support which helps businesses significantly impacted by the Coronavirus cover the costs of their employees’ wages, so more Australians can retain their jobs and continue to earn an income.

The payments are for six (6) months compared to the UK & NZ which are for three (3) months

Who will it apply to?

  • Full-time employees;
  • Part-time Employees;
  • Includes employees stood down;
  • Casual employees who have been with their employee for at least the last 12 months;
  • Sole traders.

Employees will need to have been on your books as at 1 March 2020.

What if you are not an Australian citizen?

You will need to consult your employer as there are exemptions e.g. Special Category (Sub-class 444) Visa holder.

Which employers will be affected by the payment?

Businesses who have seen the turnover drop by more than 30% for a business with a turnover of less than $1 billion or 50% for those with a turnover of greater than $1 billion.

When will it be paid?

From first week of May 2020 backdated to 30 March 2020.

What if I earn less than $1,500 in a fortnight?

The payment is a flat amount therefore you will receive the full $1,500 before tax. 

Does the payment apply to Not-For-Profit Organisation?

YES

If I receive the $1,500 per employee as an employer do, I need to pass it on to employees?

YES, you must pass the full $1,500 on to each employee entitled to the payment.

This payment equates to 70% of medium wage or 100% of medium wages for those in retail, hospitality and tourism.

Your employer must notify employees if they intend to claim the fortnightly payment of $1,500 on your behalf.

For more information on this support click here

For more information on support available to business and households call Balanix Solutions on 07 3264 4783 or CLICK HERE

Early Access to Superannuation

If you as an eligible individual are effected by the Coronavirus you can access your superannuation for up to $10,000 in the current financial year and a further $10,000 in the 2020-2021 financial year.  This will be effective from mid-April 2020.

So, who is eligible?

  • You are unemployed;
  • You are eligible to receive job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance; or
  • On or after 1 January 2020
    • You were made redundant;
    • Your working hours were reduced by 20% or more;
    • If you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

NOTE THERE WILL BE NO TAX PAYABLE ON THE AMOUNTS WITHDRAWN

If you meet the criteria and wish to access your superannuation then you need to apply directly to the Australian Taxation Office through the myGov website.

Further you will need to certify that you meet the criteria.

If successful the ATO will issue you with a determination to your superannuation fund which will provide them with the authority to release your payment.  So you wont need to apply to your superannuation fund

When can you apply?  ANSWER MID-APRIL 2020

Please call the Balanix Team if you need assistance navigating this very trying time 07 3264 4783.

To access information on more assistance on offer to business go to https://balanixsolutions.com.au/business-support-through-covid-19-coronavirus/

Update on the Financial Support from the Federal Government – 23 March 2020

Cash flow assistance for business

On 12 March the Government announced a measure to provide up to $25,000 to business with a minimum of $2,000 for eligible businesses.  Businesses with an aggregated turnover of less than $50 million and that employ workers are eligible.

Not-for-profit entities will now also be eligible.

With the new enhanced scheme employers will receive a payment equal to 100% of their salary and wages withheld (PAYG) which is up from the previously announced 50%.  Further the maximum payment has been increased from $25,000 to $50,000.

Further the minimum payment as been increased from $2,000 to $10,000.

In addition, the government will in the July to October period make a further payment of equal to the amount received up to June be the eligible entities.  So, if you received the minimum $10,000 for example you will receive an additional $10,000 or if you received the full $50,000 then you will receive another $50,000.

Note these payments are TAX FREE

The payments will be made through an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.

Talk to Balanix to determine whether it will benefit you to lodge before the due date.

Note these benefits will only apply where your eligibility was determined as at 12 March 2020 with the exception of Not-For-Profits who will be eligible regardless of when they were registered, subject to meeting other eligibility requirements.  If unsure please contact Balanix for clarification.  This is particularly relevant if you are a new charity established to response to issues arising from the Coronavirus.

Apprentices and Trainees remains unchanged from the 12 March announcement.

Income Support for Individuals

The government has temporarily expanded the eligibility to income support payments and at the same time established a time limited supplement of $550 per fortnight.  These payments will apply for the next six months.

For the period of the Coronavirus supplement there is to be an extended access to the income support payments list.

  • Expanded access – The Jobseeker Payment and Youth Allowance Jobseeker will provide payment access for permanent employees who are stood down or lose their employment; sole traders; the self-employed; casual workers; and contractor workers who meet the income tests as a result of the economic downturn due to the Coronavirus.
  • Reduced means testing – Asset testing will be waived for the period of the Coronavirus supplement for Jobseeker Payment, youth Allowance Jobseeker and Parenting Payment.
  • Reduced Waiting Time – the one-week Ordinary waiting time will be waived.  There are a number of further reductions please contact Balanix for further details.

People will need to declare that they are not, accessing employer entitlements (eg annual leave, sick leave) or Income Protection Insurance at the same time as receiving Jobseeker Payment and Youth Allowance Jobseeker under these arrangements.

From 20 March 2020, Sickness Allowance was closed to new entrants and was replaced by the Jobseeker Payment.

There are further details please contact Balanix for those details.

Please note that what Balanix has concentrated on here is what is available particularly for the self- employed and sole traders.  The Government has done a great job in this regard compared to for example the UK Government which has provided no help to date.

Temporary relief for financially distressed businesses

  • Increase in threshold at which creditors can issue a demand on a company and the time companies have to respond;
  • A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings;
  • Temporary relief for directors from any personal liability while insolvent; and
  • Providing temporary flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events.

Further the ATO will tailored solutions currently struggling due to the Coronavirus  including temporary reduction of payments or deferrals or withholding enforcement action including Director Penalties and wind-ups.

Please talk to Balanix if any of these situations potentially affect you.

There is more detail but in terms of small business Balanix preference is to provide more detail information where it applies to the majority of our clients. 

However, if you have any uncertainty don’t hesitate to contact us directly.

Supporting the flow of credit

Under the Coronavirus SME Guarantee Scheme will provide a guarantee of 50% to SME lenders for new unsecured loans to be used for working capital. This includes business with turnover up to $50 million.

The loan can be up to $250,000 per borrower and will be up to three years with an initial six month repayment holiday and further then loan will be in the form of unsecured finance.

An important part of this is that lenders will be encouraged to lend on the basis that lenders provide the facilities such that SME only have to draw down if needed.  As such SME will only pay interest on the amount drawn down.  It is about giving SME flexibility without incurring unnecessary cost.

This scheme will commence in April 2020 and be available until 30 September 2020.

More detail will follow in the coming days.

Balanix is with you and will do everything in our power to help keep you in business. Call us today 07 3264 4783.

Support

To Our Clients and Friends – Corona Virus Update

Like everyone else, the Balanix Solutions Team are navigating the effects of the Coronavirus particularly in relation to impact on our clients and friends. As you would all know by now, this pandemic is moving at a very fast pace with the lay of the land changing constantly.

Here at Balanix, we are taking a calm and measured approach. We are keeping abreast of all information being communicated as best we can. Like many organisations, we are having to assess our activities against the advice and information of those more in the know and then make decisions.

Having said this, we would like to re-assure our clients and friends that Balanix Solutions is open for business and capable of, as well as, utilizing innovative strategies if needs be to continue to provide our services to our clients, even in the event of isolation.

If you have an appointment, or need to make an appointment, and are uncertain about attending the office, please rest assured we can arrange for communication and discussion to take place by telephone, Zoom or Skype. We can also continue to work with you via email, fax or through the internet where appropriate.

All of the Balanix Team will have the ability to work remotely, and because of this remote ability we will be able to receive all communications as well as communicate amongst ourselves and with you to ensure you receive the best client care we can in these difficult circumstances.

We ask for your assistance and patience and to assist us to safeguard the health of everyone. To this end we would appreciate that if you:

  • have recently travelled overseas; or
  • have come into contact with someone who has recently travelled overseas; or
  • are currently ill or exhibiting any symptoms of illness;

you kindly telephone our office to reschedule your appointment or to arrange a telephone/Zoom/Skype appointment. 

The Balanix Team will continue to update you on specific information relating to the Coronavirus and its impact on business, as well as how we are travelling in terms of servicing clients. Important information will be emailed directly to you however, in the main we will be posting updates on our Facebook and Linkedin pages, as well as our website. Links to these are as follows to please make sure you have liked/followed our social media pages to be kept informed:

www.facebook.com/balanix

www.linkedin.com/company/balanix-solutions

www.balanixsolutions.com.au

Stay safe and we wish you well. The Balanix Team

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