Claiming Mobile, Internet and Home Phone Deductions - Hervey Bay Accountants

November 10, 2015

 

The ATO has recently released an information sheet setting out their guidelines for how taxpayers can claim phone and internet expenses.

 

In a nutshell, if use of your phone for work is incidental, you can claim up to $50 a year based on the following without having to analyse bills;

 

  • 25cents for work calls made from a landline

  • 75cents for work calls made from a mobile

  • 10cents for text messages sent from a mobile

Otherwise, the ATO require you to keep records for a 4 week representative period being either;

 

  • Where usage is itemised on the bill, determine percentage of work use based on the cost/time/number/data usage in a 4 week representative period, and then apply this across the year.   OR
     

  • Where usage is not itemised on a bill, determine the work use by keeping a record of ALL calls/data usage over a 4 week representative period and then calculation the claim using a reasonable basis. 

 

Phone and internet services are often bundled.  Where this is the case and there is no clear breakdown of the cost of each service, the ATO has accepted that it is reasonable for the taxpayer to allocate 50% of the total cost to each service. 

 

You can download the information sheet here

 

Please note, that this information sheet does not apply to mobile phones provided to employees (including directors) of companies and trusts where the phone is mainly used for employment/business.  This provision of such benefits is exempt under FBT law.  This exemption does not cover businesses operating as sole traders or partnerships.

 

Note the National Tax and Accountants Association comments on the ATO's information sheet included the following; 

 

"Unforutnately unlike the person or persons responsible for this information sheet, other workers are generally not mentally attuned to this sort of regime of keeping such a diary. That said, clients will still expect their tax agent to claim the highest amount possible.  Now that this unfortunate document has seen the light of day, tax agents will need to advise those clients who made a similar claim in their 2015 return, that they will need to keep a 4-week diary - every year!"

 

"An ATO investigator once told us that, at the ATO, they have to do so much paperwork for something simple like taking an ATO car out they they find paperwork like this run-of-the-mill.  No wonder they think a 4-week diary is normal!"

 

In Brief. (2015). NTAA The Tax Advisers' Voice, Edition 252, p5.

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