Click here to download a PDF version of the report below.

On 17 December 2018 the Government provided its Mid-Year Economic and Fiscal Outlook update for the 2018/19 year. In making the announcement it also included several measures that impacts directly on the aged care sector.

The Tax Office has earmarked home office expenses as a key focus area this tax time, citing a lack of education contributing to a high amount of mistakes, errors, and questionable claims.

According to the ATO a record $7.9 billion in deductions for ‘other work-related expenses’ were claimed by 6.7 million taxpayers last year, with the Tax Office noticing a rise in expenses related to working from home. With increasing numbers of employees working from home, extra costs related to home office could be deductible, but the ATO advise they are seeing some taxpayers either over-claiming and/or claiming private expenses which are not tax deductible.

They cite increasing evidence that many taxpayers don’t know what they can and cannot claim. In particular, they are seeing some taxpayers claiming expenses they never paid for, expenses their employer reimbursed, private expenses and expenses with no supporting records. While acknowledging that costs incurred as a direct result of working from home can be legitimately claimed, the ATO have noticed taxpayers making claims for all sorts of private expenses.

Apparently a very common issue is people claiming the entire amount of an expense (like their internet or mobile phone), not just the extra part related to their work. An ATO spokesperson advises “If working from home means sitting in front of the TV or at the kitchen table doing some emails, it’s unlikely that you are incurring any additional expenses. However, if you have a separate work area, then you can claim the work-related portion of running expenses for that space. Employees cannot generally claim occupancy-related expenses like rent, mortgage repayments, property insurance, land taxes and rates.”

The ATO have revealed that over $53 million in errors had been corrected in the first two months of tax time in 2018, stemming from “simple mistakes” such as not declaring all income or over-claiming deductions. If you are unsure about what you might be able to claim please contact our office to discuss further.

If you are ever asked to change or update a BSB and Account number as a result of an email received from a supplier or known associate, it is critical that you verbally validate this request as well.

Reports to the Australian Competition and Consumer Commission (ACCC) and Australian Cybercrime Online Reporting Network (ACORN) about scams of this sort have exposed over $22.1 million in funds being transferred from businesses to scammer accounts during 2017.

Our top tips to avoid incurring financial loss to scammers are:

1. Always verbally check the BSB and Account number changes using a trusted phone number. Confirming a change via email is not a secure method of validation.
2. Scammers often pose as executive staff members to direct employees to make urgent payments. Once again, always verbally validate these requests using a trusted phone number.
3. If you are unable to contact the requestor, contact the recipient bank to confirm if the BSB and Account number match the name on the account.

For more information on how to protect your business speak to your StewartBrown Partner of Manager and/or contact your bank.

This threat is real and should not be taken lightly! A client of our firm recently experienced this scam and unfortunately lost out financially because of it. Be vigilant and train your staff to be on the alert.