The end-of-financial-year scramble could be made a lot easier if employees simply recorded their expenses accurately through out the year, according to Concur's director or business development, who says the annual panic for businesses could be much calmer.
“Automated technology is making it easier for employees to track expenses and claim tax refunds or company reimbursement,” explains Murray Warner, director, Business Development, Asia Pacific, Concur.
“No longer do they need to rely on hundreds of paper receipts. Technology systems such as Concur let employees take a picture of a receipt and then automatically insert it into an electronic claim,” he says.
“This not only expedites the reimbursement process but it also makes it much easier for people to claim what they're entitled to at tax time.
Paul Mather, director and registered tax agent, FBT, Payroll - Salary Packaging Solutions, adds, “When it comes to tax time we urge employees to record expenses throughout the year rather than having a big job to complete when lodging a tax return.
“The end-of-financial-year flurry of activity makes mistakes more likely, which can result in penalties from the tax office or lead to under-claiming,” he says.
“Employees should also do their homework and make sure they're claiming the right expenses to avoid over- or under-claiming.
Concur and FBT, Payroll and Salary Packaging Solutions advise taxpayers to consider five key expenses when lodging tax returns:
1. Motor vehicle expenses. With the recent changes to the motor vehicle expense rules, employees must keep in mind they'll need a detailed log book record when claiming motor vehicle-related expenses. Alternatively, subject to certain limits, employees can claim on a cents-per-kilometre basis.
2. Mobile phone costs. Employees can claim a reasonable percentage of calls that are work-related. No evidence is needed but, if the percentage seems unreasonable, the tax office may investigate.
3. Internet or broadband connection at home. A reasonable estimate of work-related internet usage is required. In some cases, internet costs might be 100 percent deductible.
4. Frequent flyer points. The tax office guidance allows employees to earn up to 250 thousand point per year tax-free. Any excess may be taxed.
5. Home office expenses. Today, many employees have flexible work arrangements where they can work from home. It's important for employees to recognise that they can claim tax for their office space. Expenses might include furniture, stationery, computers, etc.
“Employees often leave their expenses right until the end, which can become a bit of a mess when lodging a return,” says Warner.
“With all the technology companies are deploying, employees no longer have to go through hundreds of paper receipts. They can keep a record of the receipt they have uploaded using their mobile phones.
“This means expenses are kept safely in one place for easy reference at tax time,” he says.