Imagine the shock of discovering your bank had reported you to a credit agency due to a financial arrangement of which you were unaware.

We would like to share this story as it’s a good example of the difference a highly specialised, financial services business like VHM can make to your financial situation.

We recently reviewed the finances of a self-employed client wanting to check if there was a better home loan available. The client had been a loyal customer of one of the ‘big four’ banks for over 30 years. So, you can imagine his surprise when we discovered he had been reported to a credit agency for being over his mortgage limit, and behind on his repayments, for three months. Even more worrying, we had recently run a credit check on his behalf less than 9 months earlier for a car loan that had revealed an excellent credit score.

To find out was going on we started asking questions and making phone calls to the bank involved and the financial regulator. We soon found the clues that revealed the extent of our client’s predicament.

In May 2020, he had requested COVID-19 relief from his bank as his business was significantly impacted by the pandemic. The bank granted 3 months reprieve and recommenced his regular repayments after that time had elapsed.

But after going through the bank’s documentation, we realised the bank had not implemented COVID-19 relief but instead given him a ‘hardship agreement’. This is a very different arrangement. Under COVID-19 relief packages, repayments to banks are paused for 3-6 months and what is owed is added to the loan balance. Under a ‘hardship agreement’ your repayments are also paused but you must repay the entire balance of the monies owed before the agreed date.

Our client, thinking he was receiving COVID-19 relief and unaware of the hardship agreement, had not made this repayment. So, the bank reported him and did not let him know.

We met with our highly distressed client to explain the seriousness of this issue. No major bank would extend him credit with a report showing a negative repayment history. But this is where VHM’s ability to talk to financial institutions and understand the nuances of the industry came to the fore. We speak bank fluently!

We immediately developed a strategy that involved literally sitting side by side with the client and making calls to the bank with follow up emails. We argued for weeks that the bank had not clearly explained the crucial difference between hardship and COVID relief. We explained that providing our client with hardship as opposed to COVID relief was a grave error of judgement. We argued that an ordinary person is not necessarily going to understand the nuances in legal language (as used by banks) stating the difference between what was offered to our client and what was understood. We also made the point very strongly the ‘duty of care’ owed to the client by the bank under the current legislation.

For two weeks the bank responded by sending automated messages to our client denying our request for a reversal of the adverse credit report. But after persisting and finding the right people to talk to at the bank, we finally received written confirmation that our client’s repayment history would be rectified with 30 days. The process took six long, intense weeks.

We cannot overestimate the severe impact this had on our clients financial and mental wellbeing. But it could have been so much worse had not been involved.

VHM Partners.

Not bigger. Better.

Working out your tax claim, now you’re working from home.

You’ve turned your home into a home office during COVID-19. So, what can you claim on your tax return and how do you claim it? Fortunately, the ATO has now made it easier than ever.

If you are one of the hundreds of thousands of Australians now working from home thanks to social distancing measures, part of your house has become your workplace.

After the stockpiling of toilet rolls and pasta subsided, a second purchasing rush got underway. With working from home on so many agendas, stocks of desks, stationery, monitors, printers, office chairs and noise-cancelling headphones ran low around the country as home offices were quickly cobbled together.

Work-related phone use is up, the internet is being pushed to its limits – for work and binge-watching TV – not to mention increased power use with everyone at home, all the time, every day.

Working from home, you’ll find yourself personally paying for things your employer would usually cover at your place of work.

The good news is, if purchases and costs are work-related, chances are some or all the costs may be claimed on your next tax return.

We’ll run through the traditional ways to claim for working from home expenses and also provide details on the ATO’s new temporary simplified method, introduced especially to apply to the current COVID-19 crisis time period.

Here’s what you can claim

In the eyes of the ATO, there are three main types of work-related expenses that you may be able to claim for – running expenses, occupancy expenses, and phone and internet.

Running Expenses

Firstly, it’s important to identify a specific space in your home that is the home office or workspace. If it’s a room that’s used for different things, like a dining room, or a shared space like a living room, then you claim for the time that you have exclusive use of the area.

In short, the ATO allows you to claim for the work-related proportion of your household running expenses. These include:

  • Utility bills for lighting, heating and cooling.
  • The cost of cleaning your workspace (this doesn’t include untidy desks or every room you’ve sat down in with your laptop).
  • The decline in value of your office equipment, computers and furniture, and the cost of maintenance and repairs to these. If you need help to work out depreciation, google ‘ATO depreciation tool’.
  • Buying other necessary items like stationery and printer ink.

Occupancy Expenses

If you’re an employee, you generally can’t claim a deduction for rent, mortgage interest, property insurance, land taxes and rates – so capital gains tax (CGT) won’t apply. But if you are running a business from home, and claiming occupancy expenses, there could be CGT implications.

Phone and Internet

Working from home means you’ll be using your phone and internet a lot more for work. You can claim a deduction for the work-related proportion of your expenses, if you have records to support your claim – which brings us to the next part…

How can you claim?

Let’s be honest, working from home isn’t easy if you’re also trying to keep young kids occupied, supervise online schooling, avoid the snacks in the fridge and getting distracted with chores like hanging out a load of washing. Right now, working out your claim is something else you’d rather not have to deal with.

Fortunately, the ATO is simplifying the way to claim work-from-home expenses during the COVID-19 crisis.

Before self-isolation and social distancing came into effect – and most of us were probably working from our employers’ premises – there were two ways to work out what you could claim.

First is the diary method. For four weeks you record how much time you spend in the home workspace, compared to others who use it. The work-use proportion you end up with is applied to all your expenses over the year.

The other method is the fixed rate calculation. You use a fixed rate of 52 cents per hour for each hour you work from home. Instead of recording all your expenses for heating, cooling, lighting, cleaning and the decline of the value of furniture, you add up your hours and multiply it by 0.52 to find the dollar value.

Other running expenses like phone and internet, computer consumables and stationery, and depreciation of your computer needs to be worked out separately. And you’ll need to keep receipts and phone accounts and identify work-related calls.

But the ATO has now made claiming much easier.

A new shortcut has been introduced to make it easier to claim expenses if you’re working from home during the current COVID-19 crisis. For the period from March 1 to June 30, you can now claim a rate of 80 cents per hour for all your running expenses, rather than needing to calculate costs for specific running expenses. And all you’ll need to do is keep a record of the number of hours worked from home.

If more than one person is working in the same house, all of you can claim. A couple living together can each individually claim the 80 cents per hour rate, and to simplify thing further, you no longer must identify your specific workspace.

So now there are three ways that you can choose to calculate your additional running expenses for the March 1 to June 30 period:

  • Claim a rate of 80 cents per work hour for all additional running expenses.
  • Claim a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus calculate the work-related portion of your phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device.
  • Claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.

Just remember, the existing methods still apply to all working from home expenses before March 1.

The Government will review these changes and possibly extend them into the next financial year, depending on when work patterns return to normal.

Things are changing daily and this article is intended as a general guide, rather than specific tax advice. Ideally, you should seek professional tax advice from an accountant or visit the ATO website for further information.

Tax advice: the information in this article does not constitute advice. This article has been written for general informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. As taxation legislation is complex, we recommend you speak with your tax advisor, financial advisor or contact the ATO for further details and expert advice regarding your personal circumstances

How to sleep easier as a small business owner

Owning your own business can free you from the nine-to-five grind, help you fulfil your passion, create financial opportunities and give you more control over your life. It can also keep you awake at night. Just ask the two million or so Australians running small businesses1.

So what are some of the traps and trials of running your own show and what can you do to replace the stress with success and a better night’s sleep?


Keeping enough money coming in to cover everything that needs to be paid out is probably the chief sleep depriver for small business owners. Many make the mistake of not having enough funds behind them to start with, putting unnecessary pressure on turnover from the outset.

The other error is not reflecting your true operating costs in what you charge for your products or services. All ventures, no matter how small or what business they are in, have costs – rent, wages, supplies, equipment, electricity, freight and travel, to name a few. Under-estimating the full cost of operating your business is one of the surest ways to strangle your cashflow. You might win work or sell lots of product based on your prices but if revenue doesn’t ultimately outstrip expenses, you won’t be in business for long.

How to remedy

  • Start with sufficient funds under your belt to cover running costs while you are building your business.
  • Consider a small business loan or overdraft to help get you started and manage initial cashflow. I can help point you in the right direction to find the right finance solution, so you can get on with doing what you do best – managing and growing your business.
  • Create an accurate pricing model that factors in all your running costs and how much profit you need to make.
  • If offering a professional service, ask for part payment up front.

The line between work and home

You might have more flexibility with work hours when self-employed but many small business owners find themselves spending more time toiling than ever before, blurring the line between their professional and personal lives. Our 24/7 digital world doesn’t help, making it easy to check emails from the couch or take a business call while driving the kids to school. Not only are long work hours taxing on you, the business owner, they can take a dramatic toll on your family and other important relationships, compounding your stress levels.

How to remedy

  • Set boundaries and be disciplined with your work hours. While it’s important to be responsive to customers and spend time on your enterprise, you are ultimately in charge of your time outside of business hours. Find a routine that works for you and your family.
  • Eat well and find time to exercise to help manage your fitness and stress levels.
  • Make time for the most important people in your life. Maximise your flexibility to attend school events, read to your kids at bedtime, make a point of eating breakfast or dinner as a family, set a regular date night, steal a weekend away and catch up regularly with friends.

Lack of help

It’s a catch 22 and major source of stress for many small business owners – the need to wear multiple hats but insufficient funds, or lack of revenue certainty, to take on extra help. Most small business operators find themselves working in and on their businesses, straddling everything from book-keeper and financial controller to human resources and marketing. Inevitably, something has to give.

There are plenty of ways to access business support for start-ups if you are prepared to be resourceful.

How to remedy

  • You might be eligible for a grant to support expansion. The Department of Industry, Innovation and Science offers a wealth of online resources to support small businesses, including information on available grants, plus free business advisory services and workshops. Visit
  • Tap into extensive skills and knowledge without the burden of full-time wages by employing experienced part-timers, such as parents who are looking to keep their professional skills up but don’t want to work full-time.
  • Talk to TAFEs and universities about internships or part-time employment opportunities for promising students. New talent can require extra supervision but the right hires can also bring energy, enthusiasm and fresh thinking.
  • Find a trusted mentor who understands your challenges and can help you navigate growth. Many business people are willing to lend an hour of their time on a regular basis to impart their learnings and wisdom.


Between Business Activity Statements (BAS), tax, insurance, superannuation, public liability, payroll, workers compensation and leave entitlements, small businesses face a stack of red tape, rules and forms.
Compliance is a certain trigger for midnight tossing and turning. This is one area small business owners should not try to navigate solo.

There are plenty of ways to access business support for start-ups if you are prepared to be resourceful.

How to remedy

  • Get a good tax adviser who can not only help with your accounting but can make sure your business complies with the latest rules. Ask other business owners for their recommendations.
  • The Australian Competition and Consumer Commission churns out regular updates for small business owners, including compliance requirements and also information on your rights. Explore the many online resources and sign up to the Commission’s newsletters at www.accc.gov.au/about-us/information-for/small-business
  • Employment laws can be a mine field. The Australian Institute of Human Resources portal (www.ahri.com.au/assist) has free resources to help you understand your responsibilities as an employer and be a better boss.

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