In addition to looking at expenses incurred whilst working from home, Birchstone Tax Law director Daniel Taborsky outlined, boutique will also have to factor in meeting loan repayments, completing trust distributions and potentially writing off outstanding debtors.

With regards to the former, Mr Taborsky told Lawyers Weekly, those who have had to work from home as a result of COVID-19 – either as an employee or a business owner – will be entitled to claim deductions for additional expenses incurred, such as electricity, cleaning, phone and internet, home office equipment and consumables such as printer ink and stationary.

“If employers are reimbursing their employees for these costs, they will be able to claim a deduction without any fringe benefits tax (FBT) concerns. If employers are purchasing items for employees to use at home (e.g. laptops or monitors) they should be able to claim a deduction for the cost by taking advantage of the instant asset write-off,” he explained.

“The ATO draws the line at occupancy costs (e.g. interest on your home loan, rent, council rates, land tax or property insurance) and general household items your employer may otherwise have provided at the office (e.g. coffee, tea or milk). Generally, employees working from home during COVID-19 will not be able to claim a deduction for these expenses.”

Calculating one’s additional expenses, Mr Taborsky mused, is not a straightforward exercise.

“In light of this, the ATO is allowing taxpayers to use a simplified method to claim home office expenses at a flat rate of 80 cents per hour, provided a diary is kept,” he outlined.

“This simplified method of calculating additional running expenses applies from 1 March 2020 until at least 30 June 2020. The ATO says it may extend it depending on when work patterns return to normal.”

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Moreover, boutiques will have to consider whether outstanding debtors have gone “bad” so the debt can be written off by 30 June and a deduction claimed, meeting repayments on Division 7A loans – something the ATO is yet to provide guidance on, Mr Taborsky noted – and the need to complete trust distributions by 30 June if one operates a business from a trust.

Whilst all of these considerations mean for a more challenging tax season than usual, Mr Taborsky stressed that there are ways that boutiques can better manage such matters, and even look to take advantage of emerging opportunities.

“For firms taking advantage of COVID-19 stimulus measures (e.g. JobKeeper [and cash flow boost]), weaning off these sugar hits will require careful planning,” he mused.

“While a lot is still up in the air (will the [government] end JobKeeper early or will further stimulus be available for affected businesses), firms should start planning their cash flow to be able to survive and thrive in a post-stimulus environment.”

There are opportunities, he continued, to take advantage of the instant asset write-off.

“However, that’s just been extended to 30 June 2020 so the imminent 30 June deadline isn’t there. Don’t leave your asset purchasing decisions to the last minute though, as the asset not only needs to be purchased, but you need to have received the asset and used it or have it installed ready for use by 31 December 2020,” he said.

“Issues with disrupted supplied chains due to COVID-19 [were] one of the factors that resulted in the [government] extending the [write-off] from 30 June to 31 December 2020.”

“Even if you’re not purchasing new assets, you may be able to claim a deduction for the entire value of your small business depreciation pool, where the balance of the pool is less than $150,000. Speak to your tax [adviser],” Mr Taborsky advised.