Office to working remotely: what that means at tax time

Office to working remotely: what that means for you at tax time

Tax time may be a little different this year. Global disasters like bushfires, cyclones, and novel coronavirus pandemic have shaken the economy. And so, a few things have changed coming up to the end of the 19/20 Financial Year.

Governments and businesses have had to adapt to global change. Universally, everyday life has been reshaped and priorities have shifted with lockdowns and restrictions. Spending preferences, online engagement, and employment situations have had to adjust. Subsequently, communication has become more vital than ever.

Prompt shifts in business operations have meant hundreds of millions of people have lost their jobs worldwide. That's half of the global workforce. Essential workers are on the front lines and those who can work remotely are counted as lucky.

While some businesses have had to close their doors, others have embraced the opportunity of remote work. So, what does that mean coming up to EOFY?

Flexible working post-pandemic

Remote working arrangements, whether full-time or on occasion, has allowed businesses to afford employees a work-life balance that matches their unique situation. Many studies show that flexible working options increase productivity and employee satisfaction while reducing business costs.

Before 2020, flexible and remote working was already on the rise. In 2019, the IWG Global Workspace Survey reported on how regularly participants worked outside their company's primary location. 52% stated they work remotely for at least 2.5 days a week.

Since then, the world has changed, and remote working predictions have accelerated. In Gartner's recent HR Survey, Brian Kropp, Distinguished VP, Research for Gartner HR, said, "While 30% of employees surveyed worked remotely at least part of the time before the pandemic, Gartner analysis reveals that post-pandemic, 41% of employees are likely to work remotely at least some of the time."

At the end of April, Slack reported that 66% of remote workers had transitioned due to COVID-19 concerns and restrictions. And Gartner's CFO survey reported that 74% of Finance leaders intend to shift employees to remote work permanently post-pandemic.

Due to these rapid changes, businesses must consider the future of their workplace and operations. And how these changes could affect their employees.

Related: 'Working remotely? Here's how to do it right'

Accessible communication is necessary

Teamwork and collaboration are impossible without communication. Businesses need to communicate the latest updates and concerns directly to customers. And knowing where to reach your target audience is key to cutting through all the noise in between.

Accessible, easy, and concise communication is necessary for everyday business operations. Cost-effective solutions such as two-way business SMS, OTT messaging, email-to-SMS, and media sharing platforms enhance the WFH experience. Companies with such established communication channels before the pandemic have experienced a seamless transition.

Reach target audiences and key stakeholders directly by utilizing an enterprise SMS gateway. Track and report SMS marketing campaigns, automate keywords and trigger responses, and schedule upcoming communication all in one place.

Stay connected.

The cost of working from home

These days, companies provide flexible working options, yet before lockdowns, many employees did not engage in remote work. Due to COVID-19, many businesses had to implement Work From Home (WFH) policies to remain operational.

To begin working remotely, employees have had to invest in resources and at-home facilities. Setting up a workstation, providing essential equipment, allocating internet connection, and additional utilities are all a part of the process.

What does that mean for new remote workers at tax time?

Related: 'Preparing your clients for EOFY'

Claiming expenses

Be aware of what you can and can't claim coming up to tax time. For those who transitioned to WFH when the novel coronavirus was declared a global pandemic, there are a few things to keep in mind.

Overall, working hours may have changed, you may have needed to buy home office furniture, and average home expenses have probably shot through the roof. Employees should consider all relevant costs at tax time.

New WFH employees: what to review at tax time

  • Hours worked - document and track dates and times
  • Home expenses - understand what expenses have accumulated during working hours
    • internet usage
    • hygiene and cleaning
    • utilities - water, heating, electricity, etc.
  • Equipment and DIY home office requirements
    • printing, paper, and stationery
    • tech software and hardware
    • furniture such as a desk and chair
  • Maintenance such as the wear and tear on carpet, curtains, and light fittings
  • Personal circumstance
    • caregivers attending to family and children
    • housemates and multiple people living in one place
  • Car expenses if you are required to attend the office for any reason

The change to WFH can mean different things depending on where you are in the world and specific job requirements. Individual situations, geographical location, and work responsibilities will determine whether you can or cannot claim certain expenses at tax time.

National tax systems have implemented different policies, such as updated WFH deductions, flat rate deductions, reduced requirements, and tax offsets.

Overall, here are some basic considerations of what you might be able to claim come EOFY.

Consider what to claim:

  • Cost of using a room's utilities
  • Work-related phone costs
  • Decline in value (depreciation) of office plant and equipment (i.e. desks, chairs, and computers)
  • Decline in value (depreciation) of curtain, carpets and light fittings (if you have a work area)

Consider what CANNOT be claimed:

  • Occupancy expenses (such as mortgage interest, rent, and rates)
  • General household items (such as coffee, tea, and milk)

Related: 'Utilise SMS for EOFY sales'

The ATO has made some changes

The Australian Taxation Office (ATO) announced special arrangements for remote workers in 2020 due to the pandemic.

Specifically, the new working from home "shortcut" allows people who were forced to work remotely to claim a rate of 80 cents per hour for all of their running expenses. It also removes previous requirements to have a dedicated space at home.

Assistant Commissioner Karen Foat said, "The shortcut method provides a rate of 80 cents per hour and will only require you to keep a record of the number of hours worked from home."

"This recognizes that many taxpayers are working from home for the first time and makes claiming a deduction much easier."

The shortcut can be used to claim working home expenses from March 1, 2020, to June 30, 2020. All claims before that should be calculated using existing approaches as they are subject to prior requirements.

Plus, the Morrison Government has announced a tax offset for those working from home. Beginning at $225 for those earning under $37,000 per annum, the tax offset can reach up to $1,080 for earnings between $37,000 and $126,000.

Security: Beware of scams

In times of uncertainty, fraudsters and scam artists flourish. Unfortunately, they target and take advantage of people in vulnerable situations using phishing, malware, and social engineering.

Currently, there are a few security risks to look out for. Protect your personal information and confidential data against prominent scams such as Superannuation fraud and SMS phishing attacks.

Smishing and phishing attacks

(Smishing = SMS phishing)

While smishing and phishing scams are prevalent year-round, they become plentiful and widespread in times of difficulty as people tend to be more susceptible. EOFY is prime time for phishing and smishing attacks as cybercriminals aim to impersonate trusted organizations. This is to gain access to personal accounts and data for malicious and illegal reasons.

It's crucial to know how an organization will communicate with you, especially concerning confidential data. Trusted organizations, including banks, government departments, and other businesses, will explicitly state how to deal with private and sensitive information.

For example, the ATO will never ask for personal information or access to accounts over email or text message. If sensitive data needed to be communicated or accessed, specific instructions would be provided by the organization on how to do so via verified channels.

COVID-19 superannuation fraud

Australia announced early access to superannuation funds to assist with short-term costs for the many impacted by changes during the pandemic.

The scheme meant that Australians could access up to $10,000 of their super amid the COVID-19 pandemic. But with scams targeted directly at super funds, phishing and identity fraud have increased exponentially.

In early May, government authorities detected 150 cases of alleged identity fraud connected to the early access scheme. Potentially depriving 150 Australians of their retirement savings, estimated to be $120,000.

Spot a super scam

Super scams can target people online, by phone or by email. Learn how to spot a super scam with these indicators:

  • ads promoting early access to super
  • offers to 'take control' of your super
  • offers to invest your super for you (for example, in real estate)
  • advises easy ways to access or 'unlock' super
  • suspicious links sent to you via email or SMS
  • emails or text messages asking for personal information or account details

Related: 'Avoid identity theft with SMS OTP'