The Australian Taxation Office (ATO) vows to continue providing assistance and relief to the businesses affected by the pandemic as it anticipates that its impact on their cashflow will still be felt during this taxation season..
Assistant Commissioner Tim Loh expounded on the matter saying, “We know that many have faced significant challenges this year and the ATO is here to help you to get your tax right the first time.”
The ATO is reminding taxpayers to be aware of changes in circumstances that may affect what needs to be included as income or what can be claimed as a deduction. It notes that among the most common changes for taxpayers include receiving an income support payment and changing what can be claimed as a work-related expense.
“Tax time can be a smooth and easy experience if you know what income you must include and what COVID-19-related expenses you can claim in your tax return,” said Loh.
Taxpayers and their registered tax agents affected by COVID-19 or financial hardship can access support at the ATO website.
The ATO also announced that starting 1 July 2021, taxpayers who paid for a COVID-19 test for work-related purposes (such as to determine if they can go to work) can now claim a deduction for the test.
To avail of this deduction, taxpayers must provide a receipt or invoice or any record that will demonstrate that they paid for the test. However, taxpayers cannot claim for a test that their employer provided or if their employer reimbursed them for the cost. In addition, only tests that are required for work-related purposes can be claimed, not for tests that are required for leisure travel or other non-work related activities.
Taxpayers may be able to claim a deduction for the cost of protective items that protect against risk of illness or injury while performing work duties.
“If you’re spending your working day in close proximity to customers and at risk of contracting COVID-19, you may be able to claim a deduction for protective items such as gloves, face masks, or sanitiser. This will be most common in industries such as retail, cleaning and hospitality” said Loh.