Am I A Share Trader or Share Investor?

This question am I a share trader or share investor, is one that has always been a contentious one.  Considering the use of the terms “investing” and “trading” are often interchangeably used but when it comes to how each of these are seen under the Taxation Laws, they are very different.

Let us first go through what is a share trader and a share investor, to highlight how they differ, and the different way income, expenses, profits and losses are dealt with under the Taxation Laws.

SHARE INVESTOR

A share investor is a person whom purchases shares to be held for the long term looking for either capital growth, dividend payments or both.

Treatment of income, expenses, profits and losses are as follows:

Dividends – Treated separately from share purchases and sales as assessable income in the financial year that the dividend is paid.

Profits – Calculated as net capital gain after deducting the cost of the share from the amount received from the sale.  This is captured under Capital Gains Tax which is separate from your normal assessable income.  For individuals who have held shares for longer than 12 months will receive a 50% discount on the gross capital gain, which is then included in your Tax Return as income in the year in which the share was sold.

Losses – As previously stated, the sale of shares fall under Capital Gains Tax, therefore a loss incurred on the sale of the shares become Capital Losses.  These are only available to offset current year gains or carried forward to future years if the year in which the loss occurred hasn’t been offset.

Expenses – Brokerage fees that are incurred upon purchasing or selling shares are not deductible against your other assessable income.  They form a part of the cost base of the share when purchasing and are subtracted against the proceeds from sale of a share.  Other expenses like interest on loans used to purchase shares or subscriptions can be deducted against your normal assessable income in the year in which they are incurred.

SHARE TRADER

A share trader is a person whom operates in the business of purchasing and selling shares for a profit, this is with a view of only holding shares for the short term.

Treatment of income, expenses, profits and losses are as follows:

Dividends – If a trader happens to hold a particular share for the required time frame and is paid a dividend, it is treated the same way as a share investor.  The dividend income will be separated and included in assessable income in the financial year that it is paid.

PROFITS

• There are two elements to calculating profits, the purchase of shares and the sale of shares:
• Purchase of Shares is seen as the purchase of trading stock as a share trader.  This means that if the share trader is still holding the stock at the end of the year, it needs to be accounted for as trading stock on hand and therefore no deduction of the cost is claimed.  Depending on how the trading stock is valued, a deduction can be possible for the unrealised loss of share where the market value at year-end is lower than purchased cost.
• Sale of shares are included in assessable income in the year in which they are sold, the gross sale receipt is included.  The cost of the shares will be claimed as a deduction in the same year, if a share has been carried over from the previous year then the cost or value of the share as per the inventory method chosen will be deducted.

LOSSES

If a loss is made on the sale of a share unlike the share investor who can only offset it against other capital gains, a trader can possibly offset their other ordinary assessable income with the loss.  This is subject to the Non-Commercial Losses Rules.

EXPENSES

Brokerage, whether purchasing or selling shares can be claimed as a deduction in the year in which it is incurred.  As for other expenses such as Interest on Loans or Subscriptions, these can be deducted in the year in which they are incurred as well.

INVESTOR OR TRADER?

The key here is the intention of the person conducting the activities, if you are purchasing shares for the long term for capital growth and/or dividend income – it is clear that you are an investor.  To classify as a Trader is not quite as simple, here we need to establish if you are operating a business of buying and selling shares for a profit.

To assist in making this determination, we look to the indicators presented in Tax Ruling 97/11 which states:

● Whether the activity has a significant commercial purpose or character,

● Whether the taxpayer has more than an intention to engage in business,

● Whether a taxpayer has a purpose of profit as well as a prospect of profit from the activity,

● Whether there is repetition and regularity of the activity,

● Whether the activity is of the same kind that is carried on in a similar manner to that of the ordinary trade in that line of business,

● Whether the activity is planned, organised and carried out in a business-like manner,

● The size, scale and permanency of the activity,

● Can the activity be better described as a hobby, a form of recreation or sporting activity?

To be classified as operating a business, a number of these indicators must be present as only relying on one will not be enough to satisfy the criteria.

A final note to be made is that it is also possible for you to be a Share Trader and Share Investor at the same time.  This is where a Share Trader purchases some shares for the long term for capital growth and/or dividends.  The person is required to determine by the end of the financial year as to whether the share should be classified as Trading Stock or as an Investment, this should then be reflected in the records of the business.

If you are unsure of how your activities are classified, please contact us for a consultation.

Christopher Coco – Director & Founder

Please note: due to the nature of the topic of this article where there is not a simple rule applied and the classification relies on the circumstances of each individuals case, this article does not provide advice for your specific situation.

Summary and Details of the Government Coronavirus COVID-19 Stimulus

Updated: 24/04/2020

With the government announcing so many stimulus measures over the past couple of weeks, we thought it was best to hold off releasing any of the information until now.  In this article we will provide a summary of the stimulus measures as they apply to individuals and business, and have detail of each of the measures beyond the summary. All of these measures have now been legislated through the parliament.

SUMMARY

Individuals

The Coronavirus Supplement – New six month supplement of $550 per fortnight paid to eligible Jobseeker (Newstart), Youth Allowance and Parenting Payment recipients with expansion of eligibility to works stood down or lose their employment.

Tax-free payments of $750 – Two payments of $750 tax-free payments to social security, veteran and other income support recipients and to eligible concession card holders. To be paid from 31 March 2020 for the first payment and from 13 July 2020 for the second payment.

Early access to superannuation benefits – New compassionate ground of release to access superannuation entitlements of up to $20,000 (up to $10,000 per release – before 1 July 2020 and after 1 July 2020.)  Available to the unemployed, those receiving payments from Centrelink and individuals who were made redundant or working hours reduced by at least 20% on or after 1 January 2020.

Reducing the minimum drawdown amounts for superannuation pensions – Minimum account-based pensions or similar drawdowns have been halved for the 2020 and 2021 years.

Reducing social security deeming rates – The upper deeming rate will be reduced from 3% to 2.25% and the lower deeming rate will be reduced from 1% to 0.25% from 1 May 2020.

Wages subsidies for apprentices and trainees – Under eligible employers, apprentices and trainees will have their wages subsidised equal to 50% of the wage for 9 months.  Maximum of $21,000 per eligible employee.

JobKeeper $1500 per Fortnight Payment – If you have been laid off by your employer or your employer’s business turnover has dropped by 30% or more (for under $1 billion turnover) or by 50% or more (for over $1 billion turnover) your employer may be eligible for the JobKeeper payment.  This is up to your employer to register for it.

Small Business

Boosting cash flow for employers –  For business with an annual turnover under $50 million and whom employ are eligible for credits against their ATO Account for the PAYG Withholding paid. The credits are split into two,  total minimum is $20,000 and maximum is $100,000.

Wages subsidies for apprentices and trainees – Employers with eligible apprentices and trainees will have their wages subsidised equal to 50% of the wage for 9 months.  Maximum of $21,000 per eligible employee.

Increasing the instant write-off threshold for business assets – Instant Asset Write Off has been increased to $150,000.  This includes small business (Less than $50million turnover) and medium business (less than $500million turnover) – for the period 12 March to 30 June 2020.  It also includes improvements to assets.

Accelerating depreciation deductions for new assets – For Small and Medium business for the time period 12 March 2020 to 30 June 2021, can deduct 50% of the cost of the asset plus the usual amount of depreciation.  This will really come into play post 30 June 2020 when the increased instant asset write off ceases.

JobKeeper Payment – Eligible employers will be able to claim a $1500 per fortnight subsidy per eligible employee where they have been forced to cease business or for businesses with turnover less than $1 Billion, where turnover has decreased by 30% or more or for businesses with turnover more than $1 Billion, where turnover has decreased by 50%.

Sole Traders / Self Employed

The Coronavirus Supplement – Where a sole trader or self employed person has had a decrease in turnover of 20% or more, they will be eligible for the $550 per fortnight coronavirus supplement from Centrelink.

Early access to superannuation benefits – Where a sole trader or self employed person has had a decrease in turnover of 20% or more, they will be eligible for the early access to super.

JobKeeper $1500 per Fortnight Payment – Where a sole trader or self employed person has had a decrease in turnover of 30% or more, they will be eligible for the $1500 per fortnight payment.  Subject to on-going reporting commitments.

Increasing the instant write-off threshold for business assets – Where a sole trader qualifies as a Small Business Entity, they will be eligible for the increased instant asset write off of up to $150,000 from 12 March 2020 to 30 June 2020.

Accelerating depreciation deductions for new assets – Where a sole trader qualifies as a Small Business Entity, they will be eligible for the accelerated depreciation where can deduct 50% of the asset plus the usual depreciation for the period 12 March 2020 to 30 June 2021.

DETAILS

Individuals

The Coronavirus Supplement

A new six-month ‘Coronavirus supplement’ of $550 per fortnight will be paid to individuals who are currently eligible for certain income support payments, including the Jobseeker Payment (Newstart), Youth Allowance and Parenting Payment (Partnered and Single).

This new (additional) supplement will be paid to eligible individuals as part of their existing income support payments (e.g., Jobseeker Payment and Youth Allowance). For the period that the Coronavirus supplement is paid, the Government will also expand access to certain income support payments (e.g.,the Jobseeker Payment, the Youth Allowance

Jobseeker and the Parenting Payment) for eligible individuals.  This will include permanent employees who are stood down or lose their employment, sole traders, self-employed, casual workers, and contract workers who meet the income tests, as a result of the economic downturn due to the Coronavirus. Additionally, asset testing for the Job Seeker Payment, the Youth Allowance Jobseeker and the Parenting Payment will be waived for the period of the Coronavirus supplement.  Income testing will still apply to the person’s other payments, consistent with current arrangements.

Tax-free payments of $750

The Government will be providing two separate $750 tax-free payments to social security, veteran and other income support recipients and to eligible concession card holders.

The first $750 payment will be available to individuals who are residing in Australia and are receiving an eligible Government payment, or are the holders of an eligible concession card, at any time from 12 March 2020 to 13 April 2020 (inclusive). This payment will be made automatically to eligible  individuals from 31 March 2020.

The second $750 payment will be available to individuals who are residing in Australia and are receiving one of the eligible Government payments or are the holders of one of the eligible concession cards on 10 July 2020 This payment will be made automatically to eligible individuals from 13 July 2020.

Each of the $750 payments will be exempt from income tax and will not count as income for the purposes of Social Security, the Farm Household Allowance and Veteran payments.

PLEASE NOTE: For those receiving an income support payment that qualifies them to receive the $550 fortnightly Coronavirus supplement, aren’t eligible to receive the two $750 payments.

Early access to superannuation benefits

The Government has introduced a new compassionate ground of release that will allow individuals to access their superannuation entitlements where those benefits are required to assist them to deal with the adverse economic effects of the Coronavirus, but only where one or more of the following requirements are satisfied:

The individual is unemployed, The individual is eligible to receive the Jobseeker Payment, Youth Allowance for jobseekers, Parenting Payment (which includes the single and partnered payments), Special Benefit or Farm Household Allowance. On or after 1 January 2020 either:

– the individual was made redundant; or

– the individual’s working hours were reduced by at least 20%; or

– if the individual is a sole trader – their business was suspended or there was a reduction in the business’s turnover of at least 20%. 

Under this new compassionate ground of release, eligible individuals will be able to access (as a lump sum) up to $10,000 of their superannuation entitlements before 1 July 2020, and a further $10,000 from 1 July 2020 (subject to a six-month time frame).

Eligible individuals who are looking to access their superannuation entitlements under the above new ground of release will be able to apply directly to the ATO through the myGov website (at www.my.gov.au) and certify that the relevant eligibility criteria is satisfied.

Please Note: The lump sum withdrawal/s from superannuation under this ground of release will not be taxable, so it is a tax-free payment/s.  It will also not affect other payments being received under Centrelink or Veteran’s Affairs.

Reducing the minimum drawdown amounts for superannuation pensions

The Government will be temporarily reducing the superannuation minimum drawdown amounts for account-based pensions and similar products by 50% for the 2020 and 2021 income years.

Reducing social security deeming rates

From 1 May 2020, the Government will be reducing both the upper and lower social security deeming rates by a further 0.25 percentage points. This is in addition to the recent 0.5 percentage point reduction, resulting in an overall reduction to the social security deeming rates of 0.75 percentage points. On this basis, as of 1 May 2020, the upper deeming rate will be reduced from 3% to 2.25%, and the lower deeming rate will be reduced from 1% to 0.25%.

JobKeeper $1500 per Fortnight Payment

Employees of eligible employers and eligible sole traders/self employed may be eligible to receive the JobKeeper payment of $1500 per fortnight for 6 months.  As it is the employer, sole trader or self employed individual who is required to register for this, please see the Small Business section of this article.

Small Business (Including Sole Traders & Self Employed)

Boosting cash flow for employers

Small and medium-sized businesses and not-for-profit entities, with an aggregated annual turnover of less than $50 million (usually based on their prior year’s turnover) that employ people, are eligible to receive a total payment (in the form of a refundable credit) of up to $100,000 (with a minimum total payment of $20,000), based on their PAYG withholding obligations in two stages:

Stage 1 payment (credit)

Commencing with the lodgement of activity statements from 28 April 2020, eligible employers that withhold PAYG tax on their employees’ salary and wages will receive a tax-free payment equal to 100% of the amount withheld, up to a maximum of $50,000.  Eligible employers that pay salary and wages will receive a minimum (tax-free) payment of $10,000, even if they are not required to withhold PAYG tax.

The tax-free payment will broadly be calculated and paid by the ATO as an automatic credit to an employer, upon the lodgement of activity statements from 28 April 2020, with any resulting refund being paid to the employer.  This means that:

• quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020; and
• monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements. 

Note that, the minimum payment of $10,000 will be applied to an entity’s first activity statement lodgement (whether for the month of March or the March quarter) from 28 April 2020.

Stage 2 payment (credit)

For employers that continue to be active, an additional (tax-free) payment will be available in respect of the June to October 2020 period, basically as follows:

• Quarterly lodgers will be eligible to receive the additional payment for the quarters ending  June 2020 and September 2020, with each payment being equal to 50% of their total initial (or Stage 1) payment (up to a maximum of $50,000). 
• Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 activity statement lodgements, with each additional payment being equal to a quarter of their total initial (or Stage 1) payment (up to a maximum of $50,000).

Again, the ATO will automatically calculate and pay the additional (tax-free) payment as a credit to an employer upon the lodgement of their activity statements from July 2020, with any resulting refund being paid to the employer.

Wages subsidies for apprentices and trainees

Employers with less than 20 full-time employees, who retain an apprentice or trainee (who was in training with the employer as of 1 March 2020) are entitled to Government funded wage subsidies.

These will be equal to 50% of the apprentice’s or trainee’s wage paid during the nine months from 1 January 2020 to 30 September 2020.  The maximum wage subsidy over the nine-month period will be $21,000 per eligible apprentice or trainee.  

Employers can register for the subsidy from early April 2020.

Increasing the instant write-off threshold for business assets

Broadly, the depreciating asset instant asset write off threshold will be increased from $30,000 (for Businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020. 

The measure applies to both new and secondhand assets first used or installed ready for use in the period beginning on 12 March 2020 and ending on 30 June 2020.

Small Business Entities (‘SBEs’)

SBEs will be able to claim an immediate deduction for depreciating assets that cost less than $150,000 provided the relevant asset is first acquired at or after 7.30 pm on 12 May 2015, by legal time in the ACT, and first used or installed ready for use on or after 12 March 2020, but before 1 July 2020.

Additionally, SBEs will also be able to claim an immediate deduction for the following:

• Improvements to a depreciating asset that was first used or installed ready for use in a previous income year.  The amount of the improvement cost must be less than $150,000 and the cost must be incurred on or after 12 March 2020, but before 1 July 2020.
• If the balance of an entity’s general small business pool (excluding current year depreciation) is less than $150,000 at the end of the 2020 income year, a deduction can be claimed for this balance.

Medium Business Entities (‘MBEs’)

MBEs can immediately deduct the cost of an asset in an income year if the asset has a cost of less than $150,000 and it was first acquired in the period beginning at 7:30 pm, by legal time in the ACT, on 2 April 2019 and ending on 30 June 2020, and the taxpayer starts to use or have the asset installed ready for use for a taxable purpose in the period beginning on 12 March 2020 and ending on 30 June 2020.

Additionally, MBEs can also claim a deduction for improvements to a depreciating asset, where the amount of the improvement cost is less than $150,000 and is incurred on or after 12 March 2020 but before 1 July 2020.

Please Note: The threshold will generally be applied to the GST exclusive cost of an eligible asset (i.e., assuming the relevant business is entitled to an input tax credit for any GST included in the acquisition cost). Importantly, this increased threshold also continues to operate on a ‘per asset’ basis, which means that eligible businesses can immediately write-off multiple assets (as long as each of the assets individually satisfy the relevant eligibility criteria).

Accelerating depreciation deductions for new assets

Broadly, a new time-limited 15-month investment incentive (available for eligible assets acquired from 12 March 2020 up until 30 June 2021) will also be introduced to accelerate certain depreciation deductions for businesses with an aggregated turnover below $500 million.

The amount that an eligible entity can deduct in the income year in which an eligible depreciating asset is first used or installed ready for use is

• 50% of the cost (or adjustable value where applicable) of the asset; and
• the amount of the usual depreciation deduction that would otherwise apply (if it were calculated on the remaining cost of the asset).

Different rules will apply where an SBE is using the general small business pool (i.e., for assets not qualifying for the instant asset write-off).  In this case, an SBE may deduct an amount equal to 57.5% (rather than 15%) of the business-use portion of the cost of an eligible depreciating asset in the year is it allocated to the pool. 

Unless specifically excluded, an eligible asset is a new asset that can be depreciated under Division 40 of the ITAA 1997 (i.e., plant and equipment and specified intangible assets, such as patents), where the asset satisfies all of the following conditions:

• The asset is new and has not previously been held (and used or installed ready for use) by another entity (other than as trading stock or for testing and trialing purposes).
• No entity has claimed depreciation deductions (including under the instant asset write-off) in respect of the asset.
• The asset is first held, and first used or installed ready for use, for a taxable purpose, between 12 March 2020 and 30 June 2021 (inclusive).

Note that a depreciating asset is not an eligible asset where a commitment to acquire or construct the asset was entered into before 12 March 2020.

JobKeeper Payment

The JobKeeper payment is a subsidy that will be paid through the tax system (i.e., by applying to the ATO) to eligible employers (and self-employed individuals) impacted by the Coronavirus.  

Eligible employers will be able to claim a subsidy of $1,500 per fortnight, per eligible employee, from 30 March 2020 (with payments commencing from the first week of May 2020), for a maximum period of six months. This subsidy will be paid by the ATO monthly in arrears and will ensure that an eligible employee receives a gross payment (i.e., before tax) of at least $1,500 per fortnight.

Self-employed individuals (i.e., businesses without employees) can also qualify to receive the JobKeeper Payment.

Employers will be eligible for the JobKeeper subsidy where:

• for a business with a turnover of less than $1 billion – its turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month); or

• for a business with a turnover of $1 billion or more – its turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month); and

• the business is not subject to the Major Bank Levy.

Self-employed individuals (i.e., businesses without employees) and not-for-profit entities (including charities) that satisfy the above requirements will be eligible to apply for the JobKeeper Payment.

Before an eligible employer can claim the JobKeeper payment in respect of an employee (‘eligible employee’), the employee must satisfy the following requirements:

• The employee is currently employed by the employer (which includes an employee who has been stood down or re-hired after they had already lost their job).

• The employee was employed by the employer as at 1 March 2020. 

• The employee is a full-time or part-time employee, or a long-term casual employee who has been employed by the employer on a regular basis for longer than 12 months at 1 March 2020.

• The employee is at least 16 years of age.

• The employee is an Australian citizen, or the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder

• The employee is not in receipt of a JobKeeper Payment from another employer.

Note: Employees who have multiple employers will need to notify their primary employer to claim the JobKeeper Payment on their behalf, as only one employer will be eligible to receive the payment. In most cases, the claiming of the tax-free threshold will be sufficient notification that an employer is the employee’s primary employer. 

Initially, businesses can start to register their interest in applying for the JobKeeper payment from 30 March 2020, on the ATO’s website at www.ato.gov.au.  The first payments under this measure are expected to be made to an eligible business from the first week of May 2020. 

Eligible employers that apply for the JobKeeper Payment (i.e., via an online application) will need to provide supporting information demonstrating a downturn in their business, and must report the number of eligible employees employed by the business on a monthly basis.

Businesses without employees (e.g., self-employed individuals) will need to provide an ABN for the business, nominate an individual to receive the JobKeeper payment and provide that individual’s Tax File Number, as well as provide a declaration on the recent business activity (presumably, to demonstrate the downturn in the business).  These businesses will also need to provide a monthly update to the ATO in order to declare their continued eligibility for the JobKeeper Payment.

The underlying purpose of the JobKeeper Payment is to ensure that eligible workers (including eligible employees) are paid a gross minimum amount of $1,500 per fortnight.  In particular, for eligible employers who receive the JobKeeper Payment for an eligible employee, the employee will receive this payment basically as follows:

(a) If the employee ordinarily receives at least $1,500 in gross salary income per fortnight, they will continue to receive their regular income according to their prevailing workplace arrangements.  In this case, the JobKeeper Payment will effectively subsidise part or all of the employee’s gross fortnightly salary income. 

(b) If the employee ordinarily receives less than $1,500 in gross salary income per fortnight, their employer must pay the employee a minimum gross fortnightly salary income of $1,500 under the JobKeeper Payment scheme.

(c) If an employee has been stood down, their employer must pay the employee a minimum gross fortnightly salary income of $1,500 under the JobKeeper Payment scheme.

(d) If an employee was employed on 1 March 2020, has subsequently ceased employment with their employer, and then has been re-engaged by the same employer, the employee will receive a minimum gross fortnightly salary of $1,500 under the JobKeeper payment scheme.

Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

Coronavirus Working From Home Shortcut Method from the ATO

The Australian Taxation Office (‘ATO’) has announced a temporary simplified short cut method to make it easier for individual taxpayers to claim deductions for additional running expenses incurred (e.g.,additional heating, cooling and lighting costs), as a result of working from home due to the Coronavirus pandemic.  Refer to the ATO’s Media Release of 7 April 2020.

Based on the announcement, the ATO will allow individuals to claim a deduction for all running expenses incurred during the period 1 March 2020 to 30 June 2020, based on a rate of 80 cents for each hour an individual carries out genuine work duties from home.  This is an alternative method to claiming home running expenses under existing arrangements, which generally require an analysis of specific running expenses incurred and more onerous record-keeping.

ATO’s 80 cents per hour method covers all running costs

The 80 cents per hour method is designed to cover all deductible running expenses associated with working from home and incurred from 1 March 2020 to 30 June 2020, including the following:

• Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work.  

• Cleaning costs for a dedicated work area.

• Phone and internet expenses.

• Computer consumables (e.g., printer paper and ink) and stationery. 

• Depreciation of home office furniture and furnishings (e.g., an office desk and a chair).

• Depreciation of home office equipment (e.g., a computer and a printer).

This means that, under the 80 cents per hour method, separate claims cannot be made for any of the above running expenses (including depreciation of work-related furniture and equipment).  As a result, using the 80 cents per hour method could result in a claim for running expenses being lower than a claim under existing arrangements (including the existing 52 cents per hour method for certain running expenses).

Furthermore, according to the ATO’s announcement, under the 80 cents per hour method:

(a) there is no requirement to have a separate or dedicated area at home set aside for working (e.g.,

a private study);

(b) multiple people living in the same house could claim under this method (e.g., a couple living

together could each individually claim running expenses they have incurred while genuinely working

from home, based on the 80 cents per hour method); and

(c) an individual will only be required to keep a record of the number of hours worked from home

as a result of the Coronavirus, during the above period.  This record can include time sheets, diary

entries/notes or even rosters.

Working from home running expenses that are incurred before 1 March 2020 (and/or incurred from this date where an individual does not use the 80 cents per hour method) must be claimed using existing claim arrangements.  Broadly, these existing claim arrangements require:

• an analysis of specific running expenses incurred as a result of working from home; and

• more onerous record-keeping (e.g., the requirement to provide receipts and similar documents for expenses being claimed, as well as the requirement to maintain a time usage diary or similar record to show how often a home work area was used during the year for work purposes). 

Source: NTAA & ATO