“We don’t want to see Tim Tams”: ATO on the lookout for dodgy work from home claims this end of financial year

Small business owners and their employees lodging their tax returns this year can expect the Australian Taxation Office to be on the lookout for shonky claims, after the shift to working from home has led to a rise in claims for biscuit supplies.

The ATO expects claims for working from home expenses to go up but has warned that some taxpayers are still confused about what costs incurred while working from home are in fact deductible.

ATO assistant commissioner Tim Loh told The Australian he does not want to see people claiming private expenses like “biscuits, coffee and tea” that ordinarily would be supplied in the office.

“We don’t want to see Tim Tams as a tax deduction in your return,” Loh said.

“If you incur the cost at home it’s not deductible.”

Claims for work-related travel and laundry costs are expected to remain low as many Australians have continued working from home since the last financial year ended.

Last year, the ATO rolled out a new working from home shortcut method that allows people to claim 80 cents per hour for all their deductible expenses, instead of calculating costs for specific running expenses.

However, there are home-related expenses you can’t claim while working from home.

Business owners and employees who work at home can’t claim costs for coffee, tea, milk and other general household items that may have previously been provided in the workplace.

Individuals also can’t claim on the cost of home schooling, including setting children up for online learning, teaching and buying equipment such as iPads and desks.

The two other methods for calculating home office expenses are the fixed rate method and the actual cost method.

Unlike the shortcut method, the fixed rate method allows taxpayers to claim 52 cents per hour on running expenses, as well as on phone, internet and some other costs.

The ATO said it will also scrutinise tax lodgments that include capital gains from selling shares, property and cryptocurrency; lodgments that are the same as last year, despite changing work circumstances; and missing income from property, including rental properties and accommodation sharing platforms.