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Changing expectations from employers and employees off the back of the COVID-19 pandemic will put more pressure on the ATO than ever before, according to a tax leader at CA ANZ.
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ATO needs to pivot from ‘team Australia’ moment
16 November 2021
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11 minute read
Speaking on the latest episode of Accountants Daily Insider, Michael Croker, tax leader at Chartered Accountants Australia and New Zealand (CA ANZ), said while the ATO is currently in the midst of its self-quoted “transformation period”, expected to last until 2024, the office will likely need to make a series of adjustments in order to respond effectively to the state of the market amid the and post the pandemic.
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“Like businesses and other not for profit government employers, the ATO has to pivot away from its ‘team Australia’ moment,” Mr Croker said.
“For example, there’s a fringe benefits tax guidance on benefits provided during COVID. They’ll have to pivot away from that because it’s amazing what’s happening out there.
“You’ve got people saying, ‘I don’t want to catch public transport. I’m a bit concerned still. Can I have occasional use of car parking? Can I get more taxis to and from work? I’m not sick, I just feel safer if I’m in a taxi. I’d like to know what your office fit out is in terms of spacing’.
“So [there’s a lot of investments going into workplaces to make them more COVID friendly, a healthy workplace.
“And then there’s people who aren’t supported by employers. I mean, they’re asking questions like, ‘Will I get a tax deduction if I buy one of those rapid antigen tests? Because my boss says, Don’t come to work unless you’re COVID free’.”
Mr Croker said CA ANZ is urging the ATO to set up a group to dissect what Australians need now that it has experienced a pandemic.
“There’s a whole host of issues. So what we’ve done on the recovery front is to suggest to the ATO that they set up a small group of people just to work through some of the post COVID issues,” he explained.
“We’ve even got employers who are offering lotteries, prizes, for getting vaccinated just to get their workforce over the line and become fully vaccinated. So a lot of interesting incentives that work out there in the market, so I think the ATO has to work on that.”
Perhaps one of the ways the ATO will look to provide some relief to employees will be upcoming changes to the 52¢ per hour fixed rate method.
In announcing that it’d be extending the work-from-home shortcut method to 30 June 2022, the ATO separately said last month that it’d “modernise” the fixed rate method too, “making it simpler and easier to use”.
“More on this later, but in the meantime we hope the extension of the shortcut method continues to provide administrative support for clients finding themselves working from home in unprecedented times,” deputy commissioner, individuals and intermediaries, Hoa Wood said at the time.
When asked his thoughts about the “ominous” announcement, Mr Croker said he suspects the ATO to be “tidying” up the method for future use.
“We don’t know for sure, but the fixed rate 52¢ per hour method is a little bit of a halfway house. On the one hand, you’ve got your 52¢ per hour deductions covering things like decline in value of furnishings, your electricity, your gas, cleaning costs, et cetera. But on the other hand, you’ve got this deduction that you can claim using normal principles, which covers things like depreciation of other assets, like your laptop or things like phone, data, internet costs, etc,” he said.
“So I imagine, not knowing for sure, but I imagine the ATO is saying, ‘Well, the 52¢ may be a little bit confusing and we want to tidy it up a bit’.”
To listen to the full episode featuring Mr Croker, click here.
During the episode, Mr Croker also shed light on how he thinks the extension to the work-from-home shortcut method will put additional pressure on the ATO over the next financial year.
He also spoke about how accounting firms are not immune to the “Great Resignation” being seen around the world, urging employers to rethink their retention strategy.
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