Australian Tax Office Scrambles to Close Working-From-Home Loophole That Could Cost Billions
- Aussie renters could claim thousands in tax deductions for working from home, following a bombshell judgement by the Administrative Appeals Tribunal (AAT).
- The Australian Tax Office (ATO) is fighting to overturn the decision, warning it could create a massive hole in the federal budget.
- Almost a third of Australian households are renters, meaning even a fraction of claims could cost the government billions of dollars.
- The ATO has warned against claiming working-from-home deductions, as taxpayers may be forced to pay back more tax if the decision is overturned.
The Australian Tax Office (ATO) is racing against the clock to close a working-from-home loophole that could cost the federal government billions of dollars. The bombshell judgement by the Administrative Appeals Tribunal (AAT) has sparked widespread concern, with the ATO warning that the decision could have far-reaching implications for taxpayers.
At the centre of the controversy is ABC radio presenter Ned Hall, who claimed the occupancy costs of a second bedroom in his apartment, which he converted into a home office during the pandemic. The AAT upheld Hall’s claim, sparking a fierce battle between the ATO and the tribunal.
According to Dale Boccabella, a tax expert from the Australian School of Business at the University of NSW, the ATO’s Federal Court case against Hall has significant implications for Aussie taxpayers. “It’s a straight-out matter of getting a deduction for basically part of your home,” he warned. “But you’ve really got to set aside the place (as an office), and no one else in the family really uses it in a substantial way.”
The ATO has published an interim decision impact statement, warning taxpayers against claiming working-from-home deductions in their tax filing this year. “In the meantime, the ATO has published an interim decision impact statement that provides the ATO’s view on the tribunal decision pending the finalisation of the appeal process,” a spokesperson said.
The 2021 census revealed that almost a third of Australian households are renters, meaning even a fraction of claims could cost the government billions of dollars. The ATO is urging taxpayers to exercise caution, as they may be forced to pay back more tax if the decision is overturned.
As the ATO scrambles to close the loophole, taxpayers are left wondering what the future holds. Will the ATO succeed in its bid to overturn the decision, or will Aussie renters be able to claim thousands in tax deductions for working from home? Only time will tell.