Fourth person jailed for Operation Elbrus

This is a joint media release between the Australian Federal Police and Australian Taxation Office.

Devyn Hammond has today been sentenced in the Supreme Court of NSW to 4 years jail for her role in a syndicate that is alleged to have defrauded the Commonwealth of more than $105 million over three years.

Ms Hammond pleaded guilty to charges of conspiring to defraud the Commonwealth and conspiring to deal with proceeds of crime in excess of $1 million. She is the fourth person to be sentenced for their role in this syndicate and was given a non-parole period of 2 years and 6 months.

Operation Elbrus was a 2017 investigation led by the Australian Federal Police (AFP), with significant assistance from the Australian Taxation Office (ATO), into a large-scale and organised tax fraud conspiracy. The investigation revealed a group of people that used payroll services companies to divert pay-as-you-go withholding tax and goods and services tax owed to the ATO.

Sixteen people were charged as part of Operation Elbrus. Ms Hammond’s sentencing today marks the fourth sentencing outcome for the operation. The other three sentencings were:

  • Joshua Kitson, the former general manager of Plutus Payroll, entered a guilty plea to conspiring to defraud the Commonwealth in November 2018 and was sentenced to four years and six months’ jail in August 2019, with a non-parole period of three years.
  • Aaron Paul entered a guilty plea in June 2019 for dealing in proceeds of crime in excess of $200,000. He was sentenced to jail for three years in February 2020.
  • Paul O’Leary entered a guilty plea on 20 August 2019 for negligently dealing in proceeds of crime in excess of $1,000,000. He was sentenced to jail for 2 years and 3 months in June 2020.

AFP Commander Investigations Eastern Command, Kirsty Schofield, said investigating complex fraud matters requires dedication, tenacity and an ongoing commitment from all involved.

“Tax fraud takes money away from essential community services and leaves everyday taxpayers to pick up the bill,” Commander Schofield said. “It’s not a victimless crime – it impacts every single Australian who wants to do the right thing.”

“The fourth sentencing is another step forward for Operation Elbrus investigators. Their commitment to this matter is stretching into its fourth year, but there is still a great deal of work to go in support of the remaining matters before the courts.”

Chief of the Serious Financial Crime Taskforce Will Day welcomed the sentence handed down today.

“These outcomes show the commitment of the Serious Financial Crime Taskforce in bringing the most serious offenders of financial crime to account,” Mr Day said.

“This was part of an elaborate and complicated scheme, but our sophisticated approach, combining intelligence and specialist powers of taskforce agencies, means tax criminals will come unstuck.

“Tax crime affects everyone. This particular fraud has ripped off innocent creditors and deprived the public of valuable funds that could otherwise be used to fund essential services,” Mr Day said.

The Serious Financial Crime Taskforce is an ATO-led joint agency taskforce that brings together the knowledge, resources and experience of relevant law enforcement and regulatory agencies to identify and address the most serious and complex forms of financial crime.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

Devyn Hammond has today been sentenced in the Supreme Court of NSW to 4 years jail for her role in a syndicate that is alleged to have defrauded the Commonwealth of more than $105 million over three years.Last modified: 10 Jul 2020QC 63143

Ride sourcing now considered ‘taxi travel’ for fringe benefits tax purposes

The Australian Taxation Office (ATO) has confirmed that for fringe benefits tax (FBT) purposes, the taxi travel exemption has been extended to include ride-sourcing vehicles. The change is because of amendments to the Fringe Benefits Tax Assessment Act 1986, which are now law.

Before the amendment became law, a taxi was defined for FBT purposes as ‘a motor vehicle licenced to operate as a taxi’. This meant the FBT exemption did not extend to ride-sourcing services provided in vehicles that were not licensed to operate as a taxi.

Trips that are exempt

Employers will now be eligible for the exemption for travel provided to their employees if it’s a single trip to or from the employee’s workplace:

  • on or after 1 April 2019
  • in a licenced taxi or other vehicle involving the transport of passengers for a fare – other than a limousine – such as a ride-sourcing vehicle.

Travel by an employee in such a vehicle on or after 1 April 2019 is also exempt if it’s as the result of sickness of, or injury to, the employee, and whole or part of the journey is directly between:

  • the employee’s place of work
  • the employee’s place of residence
  • any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.

What the changes mean for employers

The change means any benefit arising from travel by an employee using a registered taxi or ride-sourcing provider (other than in a limousine) is now exempt from FBT subject to meeting certain criteria.

ATO Deputy Commissioner John Ford explained “The change is designed to help minimise compliance costs for businesses providing transport for their employees.”

Because the changes apply from 1 April 2019, the 2020 FBT return instructions have been updated to help employers who may need to amend their FBT return. For more information on the FBT taxi travel exemption, see ato.gov.au/FBTtaxi.

Note to journalists

ATO file footage is available for download and use in news bulletins from the ATO Media Centre.

The Australian Taxation Office (ATO) has confirmed that for fringe benefits tax (FBT) purposes, the taxi travel exemption has been extended to include ride-sourcing vehicles.Last modified: 03 Jul 2020QC 63105

Tax Office toolkit helps small businesses tick tax time off their to-do list

The Australian Taxation Office (ATO) has released a tax time toolkit designed to help small businesses and their tax advisers. The toolkit packages up a series of easy-to-understand fact sheets on topics that small businesses need to know this tax time, especially given the tax implications of COVID-19.

ATO Assistant Commissioner Andrew Watson said “As we all continue to navigate the COVID-19 pandemic, we completely appreciate that it’s a really tough time for many small businesses. Our job is to continue to support businesses who need help with their tax and super obligations, in partnership with the tax profession.”

“Many small businesses have had a really difficult few months, and we fully acknowledge this. From bushfires to floods to COVID-19, we know times are tough. Small businesses have a long to-do list, and tax obligations are just one of many items that need to be done.”

“We also know that many small businesses rely on and trust the advice of their tax professional. Whether you use a registered tax professional, or lodge your own tax return, we hope our toolkit will be helpful when the time is right to sit down and consider lodging your income tax return.”

The toolkit includes a set of fact sheets to help you understand a range of tax time topics, including:

  • home-based business expenses – if as a business owner, you’re claiming deductions for the costs of using your home as your main place of business.
  • pausing or permanently closing your business – if you’ve had to pause or permanently close your business due to COVID-19.
  • motor vehicle expenses – if you’re claiming a deduction for motor vehicle expenses for your business.
  • travel expenses – if you’re claiming a deduction for expenses you incur when travelling for your business.
  • using your company’s money or assets – if you’re a director or shareholder of a company that operates a small business, and you take money out of your company or use its assets.

“Don’t forget, it’s best to ask for help with your tax if you need it. And it’s never too late to speak with us or a registered tax professional if you aren’t sure about something or need a helping hand.”

The tax time 2020 toolkit for small business is available at ato.gov.au/SBtaxtimetoolkit

Note to journalists

ATO file footage is available for download and use in news bulletins from the ATO Media Centre.

The Australian Taxation Office (ATO) has released a tax time toolkit designed to help small businesses and their tax advisers this tax timeLast modified: 03 Jul 2020QC 63104

Don’t let these Tax Time myths slow down your return

At a time when many people want the tax refund that they are expecting to arrive quickly, the Australian Taxation Office (ATO) is warning people not to get tripped up by tax time myths that slow down returns.

“Every year we see people tripped up by tax time myths. Unfortunately, this often results in slowing their return down when either they or we realise their mistake as the return is processed,” Assistant Commissioner Karen Foat said.

“Where it doesn’t delay the initial return, it can result in a surprise tax bill later on.

“There are always a range of myths that need busting around Tax Time and the changed circumstances this year have seen some new additions to the list,” Ms Foat said.

“Our main priority is to help people get the facts straight before they lodge so that it’s a smooth, easy and fast process.”

Last year, nearly 500,000 individual tax returns were amended, with some taxpayers even amending their own returns before they were processed, which actually slows down the processing of their return.

Usually, tax returns lodged electronically are processed in less than 2 weeks. Taxpayers can check the progress of their return by logging on to myGov and clicking through to the ATO. You can check the status of your return under ‘Manage Tax Returns’.

Top tax time myths for 2020

Bank details don’t update themselves

While we receive information from banks, this doesn’t extend to updating details for the bank account you nominate to have your refund deposited into. Last year many people in their rush to lodge early forgot to update bank details and delayed their refund.

It’s not okay to double dip

“We are concerned that some taxpayers may either accidentally or deliberately double dip by claiming their working from home expenses using the all-inclusive shortcut method while also claiming for specific items such as laptops or desks,” Ms Foat said.

“It’s important to remember that if you’re claiming under the shortcut method, you cannot claim a separate additional deduction for any expenses you incur as a result of working from home.”

Home to work travel is not claimable

Generally, most people cannot claim the cost of travelling from home to work unless you are required by your employer to transport bulky tools or equipment and there is not a safe place to store these at your workplace.

“If you are working from home due to COVID-19, but need to travel to your regular office sometimes, you still cannot claim the cost of travel from home to work as these are still private expenses. Even though you are working from home, your home is still a private residence – it is not a ‘place of business’,” Ms Foat said.

You can’t just claim $300 or $299 if you had no expenses!

“We often see people claiming a deduction despite not purchasing anything. When we question them, we often find it’s because they thought everyone is entitled to claim $300.

“While you don’t need receipts for claims of expenses up to $300 but you must have actually spent the money and be able to show us how you worked out your claim.”

Work-related expenses need to be work related!

Each year we see people trying to claim personal expenses under the guise of work-related expenses, but you can only claim for expenses that are directly related to earning your income.

“We have been reminding taxpayers recently that if they are in jobs that require physical contact or close proximity to customers and they had to buy their own hand sanitiser, gloves or masks for use at work, that they can claim these items,” Ms Foat said.

“However, people who aren’t in jobs that aren’t in close proximity to the public or people who have purchased these items for their general use, cannot claim these items.

“For example, people who are working from home can’t claim these items and so a high work from home claim together with a large claim for protective items may trigger a red flag and slow down your return.

“People also cannot claim for the costs of setting their children up for home schooling. These costs are private expenses.”

Lodging earlier doesn’t always mean getting your refund earlier

Each year the ATO automatically includes information from employers, banks, private health insurers (and this year JobKeeper for employees and JobSeeker amounts) in people’s returns. For most people this information is ready by the end of July.

Since leaving out income can slow your return down, if you are lodging before we have automatically included this information for you, it’s really important that you ensure you include all of the information.

Other information

2020 has been difficult but your tax return doesn’t need to be. Check out our tax time essentials to make it easier, visit ato.gov.au/taxessentials

Note for journalists:

File ATO footage is available for use in news bulletins:

www.ato.gov.au/Media-centre/Video-and-audio-files/ATO-file-footage-and-stock-vision/

At a time when many people want the tax refund that they are expecting to arrive quickly, the ATO is warning people not to get tripped up by tax time myths that slow down returns.Last modified: 30 Jun 2020QC 63082

Own a rental? – what you need to know this tax time

The Australian Taxation Office is aware that residential rental property owners may be concerned about how COVID-19, floods, or bushfires have reduced their income. This may be a result of tenants paying less or entering deferred payments plans, or travel restrictions which have affected demand for short-term rental properties. New legislation also affects the tax deductions that owners of vacant land can claim.

Assistant Commissioner Karen Foat explained that whatever the circumstances, the most important first step was to keep records of all expenses. “Without good records, you will find it difficult to declare all your rental-related income in your tax return and work out what expenses you can claim as deductions.”

Reduced rental income

The COVID-19 pandemic has placed property owners and tenants in unforeseen circumstances. Many tenants are paying reduced rent or have ceased paying because their income has been adversely affected by COVID-19.

You should include rent as income at the time it is paid, so you only need to declare the rent you have received as income. If payments by your tenants are deferred until the next financial year you do not need to include these payments until you receive them.

While rental income may be reduced, owners will continue to incur normal expenses on their rental property and will still be able to claim these expenses in their tax return as long as the reduced rent charged is determined at arms’ length, having regard to the current market conditions.

This applies whether the reduction in rent was initiated by the tenants or the owner.

Some owners may have rental insurance that covers a loss of income. It is important to remember that any payouts from these types of policies are assessable income and must be included in tax returns.

Many banks have moved to defer loan repayments for stressed mortgagees. In these circumstances, rental property owners are still able to claim interest being charged on the loan as a deduction- even if the bank defers the repayments.

Short-term rentals

“We recognise that circumstances over the past six months have seen many short-term rentals see cancellations or sit vacant as a result of either COVID-19 or bushfires,” Ms Foat said.

In circumstances where COVID-19 or natural disasters have adversely affected demand, including the cancellation of existing bookings for a short-term rental property, deductions are still available provided the property was still genuinely available for rent.

If owners decided to use the property for private purposes, offered the property to family or friends for free, offered the property to others in need or stopped renting the property out they cannot claim deductions in respect of those periods.

“Generally speaking, if your plans to rent a property in 2020 were the same as those for 2019, but were disrupted by COVID-19 or bushfires, you will still be able to claim the same proportion of expenses you would have been entitled to claim previously,” Ms Foat said.

To determine the proportion of expenses that can be claimed for short-term rental properties impacted by COVID-19 or bushfires, a reasonable approach is to apportion expenses based on the previous year’s usage pattern, unless you can show it was genuinely available for rent for a longer period of time in 2020.

If you or your family or friends move into the property to live in it because of COVID-19 or bushfires, you need to count this as private use when working out your claims in 2020.

Deductions for vacant land no longer available

For the 2020 year, expenses for holding vacant land are no longer deductible for individuals intending to build a rental property on that land but the property is not yet built. This also applies to land for which you may have been claiming expenses in previous years.

However, this does not apply to land that is used in a business, or if there has been an exceptional circumstance like a fire or flood leading to the land being vacant.

So, if you are building a rental property, you cannot claim the deductions for the costs of holding the land, such as interest. However, if your rental property was destroyed in the bushfires and you are currently rebuilding, you can claim the costs of holding your now vacant land for up to 3 years whilst you rebuild your rental property.

Common Mistakes

Travel to rental properties

“Last year, we also saw a number of taxpayers make simple mistakes such as claiming deductions for travel to inspect their rental properties,” Ms Foat said.

Residential property owners can’t claim any deductions for costs incurred in travelling to residential rental property unless they are in the rare situation of being in the business of letting rental properties.

Incorrectly claiming loan interest

Taxpayers that take out a loan to purchase a rental property can claim interest (or a portion of the interest) as a tax deduction. However, directing some of the loan money to personal use, such as paying for living expenses, buying a boat, or going on a holiday is not deductible use. The ATO uses data and analytics look closely to ensure that deductions are only claimed on the portion of the loan that relates directly to the rental property.

Capital works and repairs

“Each year, some taxpayers claim capital works as a lump sum rather than spreading the cost over a number of years. Others claim the initial work needed to get a property ready for rent immediately instead of spreading the cost over a number of years,” Ms Foat said.

Repairs or maintenance to restore something that’s broken, damaged or deteriorating in a property you already rent out are deductible immediately. Improvements or renovations are categorised as capital works and are deductible over a number of years.

Initial repairs for damage that existed when the property was purchased can’t be claimed as an immediate deduction but may be claimed over a number of years as a capital works deduction.

Short term rentals

We often see people with short term rental properties claiming for 100% of their expenses when they actually use the property for their own use or provide it to family and friends for free or at a reduced rate. Properties need to be rented out or be genuinely available for rent to claim a deduction.

Factors such as reserving the property or leaving it vacant over peak periods, not charging the market rate and the types of terms and conditions of the bookings are all taken into consideration when deciding if active and genuine efforts are being made to ensure a property is available for rent.

If a property is not genuinely available for rent, you need to limit your deductions to the days when it is.

If you are allowing friends or family to stay in the property at a reduced price, you need to limit your deductions to the amount of rent received for these periods.

Don’t forget to include all your rental income, especially from sharing economy platforms. We are matching data received from these providers to information in tax returns and will be following up discrepancies.

Poor record keeping

The number one cause of the ATO disallowing a claim is taxpayers being unable to produce receipts or other documents to support a claim. Furnishing fraudulent or doctored records will attract higher penalties and may also result in prosecution.

The ATO is aware that residential rental property owners may be concerned about how COVID-19, floods, or bushfires have reduced their income.Last modified: 25 Jun 2020QC 63040

ATO zeroes in on COVID-19 fraud

The Australian Taxation Office (ATO) is building on its significant efforts zeroing in on fraud and schemes designed to take advantage of the government’s COVID-19 stimulus package. This includes JobKeeper, early release of superannuation, and boosting cash flow for employers.

ATO Deputy Commissioner Will Day said that with so many Australians impacted by COVID-19, the ATO’s priority is to ensure payments get to those who need them.

“We know the overwhelming majority of Australians are honest, and we’ve worked hard to help those people who are impacted by COVID-19 as quickly as possible.”

“We also have an important role to ensure the integrity of the stimulus measures and when we uncover fraud or people seeking to exploit them, we’ll take action, as we know the community would expect us to do.”

To ensure the integrity of the tax and superannuation systems, the ATO has access to a large number of data sources that it uses to assess the risk of inappropriate behaviour. These sources include Single Touch Payroll, income tax returns, and information reported to us by super funds, as well as data from various third-party sources.

The community also offers the ATO valuable information where there may be suspected wrongdoing. “We’ve established a confidential tip-off line and we take all information referred to us seriously. If members of the community are concerned that someone is doing the wrong thing, they should tell us about it by completing a tip-off form online at ato.gov.au/tipoff or by calling 1800 060 062,” Mr Day said.

The ATO has also made it clear it will not tolerate illegal behaviour or development of schemes that are designed to deliberately exploit these measures, seek to avoid tax, or prey on vulnerable Australians. The agency has already seen some examples of fraud and fraudulent attempts or people developing schemes to try to steal money from the community.

“We’ve received intelligence about a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction. Not only is this not in the spirit of the measure (which is designed to assist those experiencing hardship), severe penalties can be applied to tax avoidance schemes or those found to be breaking the law. If someone recommends something like this that seems too good to be true, well, it probably is,” Mr Day said.

Penalties for fraud can include financial penalties, prosecution, and imprisonment for the most serious cases.

“It’s important to carefully check eligibility requirements before applying for any of the measures. Eligibility requirements for each of the measures are outlined on the ATO’s website. If you’re not sure, the best thing to do is check with the ATO or your tax professional.”

“Our tax system works on a self-assessment model. We will generally operate on the basis Australians are honest, meaning we will accept the information we are provided with as true and correct and make payments. However, we will be conducting checks later, so if you’ve received a benefit as part of the COVID-19 stimulus measures and we discover you are ineligible, you can expect to hear from us. If you think this may apply to you, you should contact us or speak to your tax professional,” Mr Day said.

“It is much better to come forward to make a voluntary disclosure than waiting to be audited. If in doubt on how to proceed, we recommend seeking the advice of a tax professional.”

Mr Day also reminded the community to protect their identities and be vigilant of scammers at this time.

“If you receive a text message or e-mail stating that your myGov details have been changed, or that you have applied for early release of super and you have not, don’t ignore these messages: check your myGov, call the ATO or your super fund to make sure your identity has not been compromised. But don’t click on any links – one technique used by scammers to steal your information is to mock-up messages which appear to be from the ATO.”

What’s on the ATO’s radar

JobKeeper

The ATO’s compliance efforts for JobKeeper are focused on ensuring that:

  • entities meet the eligibility requirements in relation to business income
  • entities are claiming for eligible employees
  • eligible business participants are correctly making claims
  • entities are not manipulating their turnover in order to satisfy the decline in turnover test

The ATO has also published advice warning of the types of JobKeeper schemes that it regards as high-risk and are likely to attract its attention: Practical Compliance Guideline PCG 2020/4: Schemes in relation to the JobKeeper payment.

Early release of superannuation

Behaviours that attract the ATO’s attention in relation to the early release of superannuation measure include:

  • applying when there is no change to your regular salary, wage, or employment information 
  • artificially arranging your affairs to meet the eligibility criteria
  • making false statements or fraudulent attempts to meet the eligibility criteria
  • withdrawing and re-contributing super for a tax advantage – this could not only trigger anti-avoidance rules but also result in additional taxes and impact your eligibility for a super co-contribution.

Boosting cash flow for employers

The ATO is on the lookout for employers who have entered a scheme which is designed to:

  • artificially restructure businesses to gain access to the cash flow boost
  • artificially changing the character of payments to salary or wages to maximise the cash flow boost
  • inflating reported withholding amounts to maximise the cash flow boost
  • resurrecting dormant entities or phoenixing
  • making false statements or fraudulent attempts to create an entitlement.

Serious Financial Crime Taskforce (SFCT)

Serious financial crime affecting the ATO-administered measures of the Commonwealth Coronavirus Economic Response Package has been made a priority for the ATO-led joint-agency Serious Financial Crime Taskforce (SFCT). The SFCT brings together the knowledge, resources and experience of multiple agencies to identify and address the most serious and complex financial crimes.

More information

Information about the ATO’s compliance approach for the COVID-19 stimulus measures – including case studies – are available on the ATO website at ato.gov.au/COVIDcompliance

Information about how to protect your identity and what to do if you think someone has misused your identity is available on the ATO website at ato.gov.au/scams

ATO file footage is available for download and use in news bulletins from the ATO Media Centre.

The Australian Taxation Office (ATO) is building on its significant efforts zeroing in on fraud and schemes designed to take advantage of the government’s COVID-19 stimulus package. This includes JobKeeper, early release of superannuation, and boosting cash flow for employers. Last modified: 23 Jun 2020QC 63014

Set yourself up for a smoother tax time

The Australian Taxation Office (ATO) is advising people to act now to improve their tax time experience. There are some simple things taxpayers can do now to ensure they can lodge their tax return quickly, securely, and smoothly.

Assistant Commissioner Karen Foat said that “if you are planning on lodging your own return, you can’t beat the ease and accessibility of the ATO’s online myTax service. It has almost completely replaced paper lodgments.

“It’s no surprise that myTax, which processes most refunds in less than 2 weeks and many in under a week, is growing in popularity. Most people with simple tax affairs can lodge in under half-an-hour from the comfort of their own homes. For most people a lot of their income will be automatically included in their return by the end of July, making it even easier.

“But there are two main speed-bumps that taxpayers hit when lodging online via myTax for the first time. The first is linking their myGov account to the ATO’s online services.”

Avoid Speedbump 1: Link myGov to the ATO now if you plan to do your own return

“My number one piece of advice for people who are going to use myTax for the first time is to log into your myGov account and link to the ATO well before tax time. You’ll be prompted to answer two questions, based on your records, such as an income statement or Centrelink payment summary from the past 2 years, or your bank account details,” Ms Foat said.

Those who don’t have enough information to confirm their identity will need to phone the ATO to get a unique linking code, which can be entered instead of answering the questions. To speed up the process, taxpayers need to have their identification information ready when they call the ATO, such as their Tax File Number and their driver’s licence, or Medicare card.

“Needing a linking code was the number 1 reason that people called us last July. While this is a vote of confidence from taxpayers eager to use myTax, it is a faster process if you get organised early,” Ms Foat said.

“If you need to call us to link, we encourage you to do so now so that you don’t hit any delays when you choose to lodge your tax return. If you need a linking code, June is a great time to get that sorted.”

After people have linked to the ATO, they can not only lodge their tax returns during tax time, but also track their refunds, access their past tax records, manage their super accounts, and view their income statement.

Linking myGov to the ATO also allows sole traders eligible for JobKeeper or wishing to manage their business obligations, to enrol and nominate through ATO online services via MyGov. Those who haven’t used online services before will need to follow the linking process outlined above.

Avoid Speedbump 2: Make sure your income details are complete and finalised before you lodge

“The other main delay at tax time is people lodging before they have all of the information about their income,” Ms Foat said.

For most Australians, income statements have replaced payment summaries. This means that instead of receiving a payment summary from their employer, most people’s income statements will be finalised electronically, and the information provided directly to the ATO. You can view your income statement through myGov and the information from it is automatically included in your return in myTax by the ATO. If you use a tax agent, they will also have access to this information.

Income statements show their year-to-date salary and wages, PAYG withholding tax, and any employer super contributions in near real-time, but it is important to wait until it is finalised before lodging a tax return. Employers have until July 31 to finalise income statements.

“We often see people too eager to get a tax refund making obvious mistakes, which can either delay processing the tax return or result in a bill later on,” Ms Foat said.

“It’s important to check that your employer has finalised the information in your income statement and it is marked as ‘tax ready’ before you lodge.

“Other information from banks, health funds and government agencies will also be automatically inserted into your tax return. For most people this will happen by the end of July.

“Lodging once we have included all of your information in your tax return makes it even easier, but if you are lodging before then, make sure the information provided is complete, accurate, and up to date to avoid delays or a debt later on,” Ms Foat said.

More information

2020 has been difficult but your tax return doesn’t need to be. For more information visit:

The ATO is advising people on some simple things taxpayers can do now to ensure they can lodge their tax return quickly, securely, and smoothly.Last modified: 16 Jun 2020QC 62908

2020 has been difficult but your tax return doesn’t need to be

The Australian Taxation Office (ATO) recognises that the community has experienced significant challenges this year. The ATO’s support and guidance should make tax time easier, particularly where new circumstances mean that people are receiving a different type of income or able to claim new deductions.

Assistant Commissioner Karen Foat said the ATO has a range of different approaches to support taxpayers and the community through this tax time.

“We know many of our clients and their agents will have questions about how different types of income and expenses may affect their obligations this year. We’re helping to make sure people know how to get it right.

“We have published information on our website to help you get it right when lodging this year, including the ‘Tax Time Essentials’ page which is a one stop shop for the things that are a little different this year and how they impact your return.

“If you’ve read through the information on our website and still have a question, search our online forum ‘ATO Community’. This forum is available 24 hours a day and we have a great community of expert members who respond to questions. In a lot of cases, there’s an ATO-endorsed response to help you. If not, post it yourself and we’ll have a response back to you as quick as we can.”

How has COVID-19 impacted work-related expenses?

“This tax time the ATO expects to see a substantial increase in people claiming deductions for working from home or for protective items required for work,” Ms Foat said.

Working from home expenses

The ATO has already announced a temporary ‘short-cut method’ that applies from 1 March 2020 to 30 June 2020. The short cut method makes it easier for the millions of Australians who have incurred some form of expense for working from home as a result of COVID-19. It covers all deductible expenses and can be used by multiple people working from home in the same house. People claiming their working from home expenses using the shortcut method, should include the amount at the ‘other work-related expenses’ question in your tax return and include ‘COVID-hourly rate’ as the description.

“If you use the shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim. But it is all inclusive, meaning you can’t claim for any other working from home expenses,” Ms Foat said.

Taxpayers can still choose to use one of the other existing methods to calculate their expenses for working from home if they prefer.

Protective clothing

Another deduction some people might be claiming due to COVID-19 is expenses for protective items required for work.

“Taxpayers working in jobs that require physical contact or close proximity with customers or clients during COVID-19 measures may be able to claim a deduction for items such as gloves, face masks, sanitiser or anti-bacterial spray if they have paid for the items and not been reimbursed. This includes industries like healthcare, retail and hospitality” Ms Foat said.

You still cannot claim travelling from home to work

“Generally, most people cannot claim the cost of travelling to and from work and working from home as a result of COVID-19 does not change this. For example, if you are working from home because of COVID-19 but need to go to your regular office one day per week, your home to work travel is still private travel and cannot be claimed,” Ms Foat said.

Reduce claims that aren’t relevant for part of the year

“With more people working from home, working reduced hours or unfortunately not working at all, we expect to see claims for laundry expenses or travel expenses decline this year,” Ms Foat said.

“If you aren’t travelling for work, you can’t claim travel expenses. If you aren’t wearing your work uniform, you can’t claim laundry expenses. It’s still important to meet the three golden rules: you must have spent the money and not have been reimbursed, it must relate directly to earning your income, and you must have a record to prove it.

“What you can claim really depends on your circumstances. Whilst we are trying to make it easier for people to claim what they are entitled to; we are also asking people to take a bit of extra care if their circumstances have changed this year.” Ms Foat said.

What if my income is different?

JobKeeper and JobSeeker

Taxpayers who have received JobKeeper payments from their employer, don’t need to do anything different. The payments will be included as salary and wages and/or allowances, in their regular income statement, which their employer provides directly to the ATO.

“Your income statement can be accessed via myGov and the information is automatically included into your tax return by the end of July. If you use a tax agent, they also have access to this information. The figures in your income statement should already include any JobKeeper you have received. If you aren’t sure, check with your employer.

Sole traders who have received the JobKeeper payment on behalf of their business will need to include the payments as assessable income for the business.

If you have received JobSeeker, the ATO will also load this information into your tax return at the Government Payments and Allowances question once it’s ready. If you are lodging before this information is included for you, you will need to make sure you include it. Leaving out income can slow your return down or result in a bill later so it’s definitely best avoided.

Stand down payments

Some employees may have received a one-off or regular payment after being temporarily stood down due to COVID-19. These payments are also taxable and appear in their income statement and in their return. If people aren’t sure whether these amounts have been included in their income statement, they should check with their employer.

Other income types

Similarly, taxpayers need to include income such as income protection, sickness or accident insurance payments, redundancy payments and accrued leave payments in their tax return. The tax return instructions explain how to include these amounts.

Early access to superannuation

“If you received early access to your super this year under the special arrangements due to COVID-19, any amounts you’ve withdrawn from super under this program are tax-free and you do not need to declare them in your tax return,” Ms Foat said.

Additional information

The ATO recognises that things are different this year, so we have developed some useful resources including:

Tax Time Essentials, available at: ato.gov.au/taxessentials

Examples

Example 1 – Barista receiving JobKeeper

Ethan is an employee who works as a barista. After being financially impacted by COVID-19, the café Ethan works for enrolled to receive JobKeeper payments on his behalf.

The café continues operating as takeaway only and Ethan is given some hand sanitiser for use during his shifts. He also purchases a face mask, which he is not reimbursed for. When he completes his tax return, he claims the cost of the face mask, ensuring he keeps his receipt as proof of his purchase.

He also checks that his salary and wages and allowances on his income statement are up to date, including JobKeeper payments made to him by the café. Ethan needs to confirm that his total salary and wages and any allowances are included in his tax return. Generally, this will be included in his return by the ATO by the end of July and will include JobKeeper payments.

Example 2 – IT contractor working from home

Natalie is employed by a company that provides IT support. From time to time Natalie must drive her car from the office to the client’s premises and assist them on site. Due to COVID-19, Natalie started working from home on 23 March and was only able to provide phone support to clients. Natalie purchased a new headset and stationery, as well as incurring additional phone and internet costs while working from home.

Natalie decides to claim all her working from home expenses using the new temporary rate of 80 cents per hour. She uses her time sheets to calculate the hours she worked from home between 23 March and 30 June.

When she completes her tax return, Natalie makes sure she only claims a deduction for the car expenses she incurred when travelling from the office to the client’s premises. As Natalie worked solely from home for approximately three months of the year, mostly supporting clients over the phone, her claim for car expenses this year is less than her claim for last year.

The ATO’s support and guidance should make tax time easier, particularly where new circumstances mean that people are receiving a different type of income or able to claim new deductionsLast modified: 11 Jun 2020QC 62845

2020 has been difficult but your tax return doesn’t need to be

The Australian Taxation Office (ATO) recognises that the community has experienced significant challenges this year. The ATO’s support and guidance should make tax time easier, particularly where new circumstances mean that people are receiving a different type of income or able to claim new deductions.

Assistant Commissioner Karen Foat said the ATO has a range of different approaches to support taxpayers and the community through this tax time.

“We know many of our clients and their agents will have questions about how different types of income and expenses may affect their obligations this year. We’re helping to make sure people know how to get it right.

“We have published information on our website to help you get it right when lodging this year, including the ‘Tax Time Essentials’ page which is a one stop shop for the things that are a little different this year and how they impact your return.

“If you’ve read through the information on our website and still have a question, search our online forum ‘ATO Community’. This forum is available 24 hours a day and we have a great community of expert members who respond to questions. In a lot of cases, there’s an ATO-endorsed response to help you. If not, post it yourself and we’ll have a response back to you as quick as we can.”

How has COVID-19 impacted work-related expenses?

“This tax time the ATO expects to see a substantial increase in people claiming deductions for working from home or for protective items required for work,” Ms Foat said.

Working from home expenses

The ATO has already announced a temporary ‘short-cut method’ that applies from 1 March 2020 to 30 June 2020. The short cut method makes it easier for the millions of Australians who have incurred some form of expense for working from home as a result of COVID-19. It covers all deductible expenses and can be used by multiple people working from home in the same house. People claiming their working from home expenses using the shortcut method, should include the amount at the ‘other work-related expenses’ question in your tax return and include ‘COVID-hourly rate’ as the description.

“If you use the shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim. But it is all inclusive, meaning you can’t claim for any other working from home expenses,” Ms Foat said.

Taxpayers can still choose to use one of the other existing methods to calculate their expenses for working from home if they prefer.

Protective clothing

Another deduction some people might be claiming due to COVID-19 is expenses for protective items required for work.

“Taxpayers working in jobs that require physical contact or close proximity with customers or clients during COVID-19 measures may be able to claim a deduction for items such as gloves, face masks, sanitiser or anti-bacterial spray if they have paid for the items and not been reimbursed. This includes industries like healthcare, retail and hospitality” Ms Foat said.

You still cannot claim travelling from home to work

“Generally, most people cannot claim the cost of travelling to and from work and working from home as a result of COVID-19 does not change this. For example, if you are working from home because of COVID-19 but need to go to your regular office one day per week, your home to work travel is still private travel and cannot be claimed,” Ms Foat said.

Reduce claims that aren’t relevant for part of the year

“With more people working from home, working reduced hours or unfortunately not working at all, we expect to see claims for laundry expenses or travel expenses decline this year,” Ms Foat said.

“If you aren’t travelling for work, you can’t claim travel expenses. If you aren’t wearing your work uniform, you can’t claim laundry expenses. It’s still important to meet the three golden rules: you must have spent the money and not have been reimbursed, it must relate directly to earning your income, and you must have a record to prove it.

“What you can claim really depends on your circumstances. Whilst we are trying to make it easier for people to claim what they are entitled to; we are also asking people to take a bit of extra care if their circumstances have changed this year.” Ms Foat said.

What if my income is different?

JobKeeper and JobSeeker

Taxpayers who have received JobKeeper payments from their employer, don’t need to do anything different. The payments will be included as salary and wages and/or allowances, in their regular income statement, which their employer provides directly to the ATO.

“Your income statement can be accessed via myGov and the information is automatically included into your tax return by the end of July. If you use a tax agent, they also have access to this information. The figures in your income statement should already include any JobKeeper you have received. If you aren’t sure, check with your employer.

Sole traders who have received the JobKeeper payment on behalf of their business will need to include the payments as assessable income for the business.

If you have received JobSeeker, the ATO will also load this information into your tax return at the Government Payments and Allowances question once it’s ready. If you are lodging before this information is included for you, you will need to make sure you include it. Leaving out income can slow your return down or result in a bill later so it’s definitely best avoided.

Stand down payments

Some employees may have received a one-off or regular payment after being temporarily stood down due to COVID-19. These payments are also taxable and appear in their income statement and in their return. If people aren’t sure whether these amounts have been included in their income statement, they should check with their employer.

Other income types

Similarly, taxpayers need to include income such as income protection, sickness or accident insurance payments, redundancy payments and accrued leave payments in their tax return. The tax return instructions explain how to include these amounts.

Early access to superannuation

“If you received early access to your super this year under the special arrangements due to COVID-19, any amounts you’ve withdrawn from super under this program are tax-free and you do not need to declare them in your tax return,” Ms Foat said.

Additional information

The ATO recognises that things are different this year, so we have developed some useful resources including:

Tax Time Essentials, available at: ato.gov.au/taxessentials

Examples

Example 1 – Barista receiving JobKeeper

Ethan is an employee who works as a barista. After being financially impacted by COVID-19, the café Ethan works for enrolled to receive JobKeeper payments on his behalf.

The café continues operating as takeaway only and Ethan is given some hand sanitiser for use during his shifts. He also purchases a face mask, which he is not reimbursed for. When he completes his tax return, he claims the cost of the face mask, ensuring he keeps his receipt as proof of his purchase.

He also checks that his salary and wages and allowances on his income statement are up to date, including JobKeeper payments made to him by the café. Ethan needs to confirm that his total salary and wages and any allowances are included in his tax return. Generally, this will be included in his return by the ATO by the end of July and will include JobKeeper payments.

Example 2 – IT contractor working from home

Natalie is employed by a company that provides IT support. From time to time Natalie must drive her car from the office to the client’s premises and assist them on site. Due to COVID-19, Natalie started working from home on 23 March and was only able to provide phone support to clients. Natalie purchased a new headset and stationery, as well as incurring additional phone and internet costs while working from home.

Natalie decides to claim all her working from home expenses using the new temporary rate of 80 cents per hour. She uses her time sheets to calculate the hours she worked from home between 23 March and 30 June.

When she completes her tax return, Natalie makes sure she only claims a deduction for the car expenses she incurred when travelling from the office to the client’s premises. As Natalie worked solely from home for approximately three months of the year, mostly supporting clients over the phone, her claim for car expenses this year is less than her claim for last year.

The ATO’s support and guidance should make tax time easier, particularly where new circumstances mean that people are receiving a different type of income or able to claim new deductionsLast modified: 11 Jun 2020QC 62845

2020 has been difficult but your tax return doesn’t need to be

The Australian Taxation Office (ATO) recognises that the community has experienced significant challenges this year. The ATO’s support and guidance should make tax time easier, particularly where new circumstances mean that people are receiving a different type of income or able to claim new deductions.

Assistant Commissioner Karen Foat said the ATO has a range of different approaches to support taxpayers and the community through this tax time.

“We know many of our clients and their agents will have questions about how different types of income and expenses may affect their obligations this year. We’re helping to make sure people know how to get it right.

“We have published information on our website to help you get it right when lodging this year, including the ‘Tax Time Essentials’ page which is a one stop shop for the things that are a little different this year and how they impact your return.

“If you’ve read through the information on our website and still have a question, search our online forum ‘ATO Community’. This forum is available 24 hours a day and we have a great community of expert members who respond to questions. In a lot of cases, there’s an ATO-endorsed response to help you. If not, post it yourself and we’ll have a response back to you as quick as we can.”

How has COVID-19 impacted work-related expenses?

“This tax time the ATO expects to see a substantial increase in people claiming deductions for working from home or for protective items required for work,” Ms Foat said.

Working from home expenses

The ATO has already announced a temporary ‘short-cut method’ that applies from 1 March 2020 to 30 June 2020. The short cut method makes it easier for the millions of Australians who have incurred some form of expense for working from home as a result of COVID-19. It covers all deductible expenses and can be used by multiple people working from home in the same house. People claiming their working from home expenses using the shortcut method, should include the amount at the ‘other work-related expenses’ question in your tax return and include ‘COVID-hourly rate’ as the description.

“If you use the shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim. But it is all inclusive, meaning you can’t claim for any other working from home expenses,” Ms Foat said.

Taxpayers can still choose to use one of the other existing methods to calculate their expenses for working from home if they prefer.

Protective clothing

Another deduction some people might be claiming due to COVID-19 is expenses for protective items required for work.

“Taxpayers working in jobs that require physical contact or close proximity with customers or clients during COVID-19 measures may be able to claim a deduction for items such as gloves, face masks, sanitiser or anti-bacterial spray if they have paid for the items and not been reimbursed. This includes industries like healthcare, retail and hospitality” Ms Foat said.

You still cannot claim travelling from home to work

“Generally, most people cannot claim the cost of travelling to and from work and working from home as a result of COVID-19 does not change this. For example, if you are working from home because of COVID-19 but need to go to your regular office one day per week, your home to work travel is still private travel and cannot be claimed,” Ms Foat said.

Reduce claims that aren’t relevant for part of the year

“With more people working from home, working reduced hours or unfortunately not working at all, we expect to see claims for laundry expenses or travel expenses decline this year,” Ms Foat said.

“If you aren’t travelling for work, you can’t claim travel expenses. If you aren’t wearing your work uniform, you can’t claim laundry expenses. It’s still important to meet the three golden rules: you must have spent the money and not have been reimbursed, it must relate directly to earning your income, and you must have a record to prove it.

“What you can claim really depends on your circumstances. Whilst we are trying to make it easier for people to claim what they are entitled to; we are also asking people to take a bit of extra care if their circumstances have changed this year.” Ms Foat said.

What if my income is different?

JobKeeper and JobSeeker

Taxpayers who have received JobKeeper payments from their employer, don’t need to do anything different. The payments will be included as salary and wages and/or allowances, in their regular income statement, which their employer provides directly to the ATO.

“Your income statement can be accessed via myGov and the information is automatically included into your tax return by the end of July. If you use a tax agent, they also have access to this information. The figures in your income statement should already include any JobKeeper you have received. If you aren’t sure, check with your employer.

Sole traders who have received the JobKeeper payment on behalf of their business will need to include the payments as assessable income for the business.

If you have received JobSeeker, the ATO will also load this information into your tax return at the Government Payments and Allowances question once it’s ready. If you are lodging before this information is included for you, you will need to make sure you include it. Leaving out income can slow your return down or result in a bill later so it’s definitely best avoided.

Stand down payments

Some employees may have received a one-off or regular payment after being temporarily stood down due to COVID-19. These payments are also taxable and appear in their income statement and in their return. If people aren’t sure whether these amounts have been included in their income statement, they should check with their employer.

Other income types

Similarly, taxpayers need to include income such as income protection, sickness or accident insurance payments, redundancy payments and accrued leave payments in their tax return. The tax return instructions explain how to include these amounts.

Early access to superannuation

“If you received early access to your super this year under the special arrangements due to COVID-19, any amounts you’ve withdrawn from super under this program are tax-free and you do not need to declare them in your tax return,” Ms Foat said.

Additional information

The ATO recognises that things are different this year, so we have developed some useful resources including:

Tax Time Essentials, available at: ato.gov.au/taxessentials

Examples

Example 1 – Barista receiving JobKeeper

Ethan is an employee who works as a barista. After being financially impacted by COVID-19, the café Ethan works for enrolled to receive JobKeeper payments on his behalf.

The café continues operating as takeaway only and Ethan is given some hand sanitiser for use during his shifts. He also purchases a face mask, which he is not reimbursed for. When he completes his tax return, he claims the cost of the face mask, ensuring he keeps his receipt as proof of his purchase.

He also checks that his salary and wages and allowances on his income statement are up to date, including JobKeeper payments made to him by the café. Ethan needs to confirm that his total salary and wages and any allowances are included in his tax return. Generally, this will be included in his return by the ATO by the end of July and will include JobKeeper payments.

Example 2 – IT contractor working from home

Natalie is employed by a company that provides IT support. From time to time Natalie must drive her car from the office to the client’s premises and assist them on site. Due to COVID-19, Natalie started working from home on 23 March and was only able to provide phone support to clients. Natalie purchased a new headset and stationery, as well as incurring additional phone and internet costs while working from home.

Natalie decides to claim all her working from home expenses using the new temporary rate of 80 cents per hour. She uses her time sheets to calculate the hours she worked from home between 23 March and 30 June.

When she completes her tax return, Natalie makes sure she only claims a deduction for the car expenses she incurred when travelling from the office to the client’s premises. As Natalie worked solely from home for approximately three months of the year, mostly supporting clients over the phone, her claim for car expenses this year is less than her claim for last year.

The ATO’s support and guidance should make tax time easier, particularly where new circumstances mean that people are receiving a different type of income or able to claim new deductionsLast modified: 11 Jun 2020QC 62845