As the COVID19 pandemic escalates, new government measures are being introduced. These will have a huge impact on individuals and businesses.
People are anxious and confused about what relief is available to them.
The government is allowing tax relief for some – while also providing certain subsidies, in an attempt to stimulate the economy and support those who are facing financial hardship.
We have shared some tips below – but for more comprehensive information about what you are eligible for please contact our team. DFK Everalls provides a full suite of services.
We can help with more than just tax! We will work with you to ensure your finances are best positioned to weather this period of uncertainty.
Tax Relief for Financial Hardship
Question: I’ve had my hours cut back at work and I can’t afford to pay the bills. What assistance is available to me?
Firstly, if you are usually due for a tax refund (eg because of negatively geared investment property), rather than waiting till you lodge your tax return to get your refund you may be able to reduce the amount of tax being taken out of your pay by your employer by lodging an application for a PAYG withholding variation. Please give us a call if you need a hand completing the application.
Secondly, if you pay PAYG income tax instalments, you may be able to vary the March Quarter instalment to zero and claim back a credit for the instalments you paid for Sept 19 and Dec 19.
Thirdly, talk to your bank manager as they may be able to defer some of your mortgage repayments.
Lastly, you can only access your super early in very limited circumstances – mainly related to compassionate grounds and severe financial hardship.
Examples of severe financial hardship include needing money to:
- make a payment on a home loan. (If your mortgagee is threatening to sell your home and you can’t pay your mortgage through your savings or another loan)
- meet reasonable and immediate family living expenses if
- you have no savings
- you have been receiving government income support payments continuously for 26 weeks or more.
Early access to super rules are very strict. If your super is released it will be taxed.
Working from home
Question: My employer is encouraging or requiring me to work from home. Will I be able to claim a deduction for home office expenses?
If you work from home because of COVID-19, you may be able to claim a deduction for the additional running expenses you incur. These include expenses associated with heating, cooling and lighting in the area you are working from, phone and internet and other running expenses.
The easiest way to claim is to keep track of the hours working from home and then claim 52 cents per hour.
Buying protective items
Question: Can I claim a deduction for gloves, face masks, sanitiser, anti-bacterial spray that I use at work?
You may be able to claim a deduction for protective items you purchase and use at work. To be deductible both of the following must apply:
- You must have incurred the expense yourself.
- It must have a sufficient connection with the earning of your assessable income. This means
- you are exposed to the risk of illness or injury in the course of carrying out your income earning activities
- the risk is not remote or negligible
- the protective item is of a kind that provides protection from that risk and would reasonably be expected to be used
- you use the item in the course of carrying out your income earning activities.
If your specific employment duties require you to have physical contact or be in close proximity to customers or clients while carrying out your duties or you are involved in cleaning premises, you can claim a deduction for expenditure on protective items.
Examples of this type of work include the:
- medical industry (such as doctors, nurses, dentists and allied health workers)
- cleaning industry
- airline industry
- hairdressing and beautician industry
- retail, café and restaurant industry.
If you work in these industries or occupations, the risk is not remote or negligible.
You can only claim a deduction for the portion of the expense that relates to your work-related use.
Residents temporarily overseas
Question: I am working overseas because of COVID-19. What are my Australian tax obligations?
If you usually live and work in Australia and are only temporarily overseas as a result of COVID-19, there will be no change to your Australian tax obligations. If you are required to pay foreign income tax overseas, you will usually be entitled to a foreign income tax offset against your Australian tax payable.
Not an Australian resident, but temporarily in Australia? Give us a call to discuss the issues applicable to you.
Tax relief – Expert advice to support you
We understand many people are feeling anxious during this uncertain time.
The long term impact COVID19 will have on the economy is still to be seen. We want to help you ride this out till it all settles down again.
DFK Everalls is well set up to provide our quality services while prioritising the health & safety of our team members and clients.
We can provide an all in one service for your tax and wealth protection needs, in consultations via phone, email or video conference. We can also swap documents via our secure client portal.
Give us a call if you’d like some help navigating what support is available for you and what tax relief you’re eligible for.