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Huge WFH loophole exposed after Aussie scores astonishing win - as the ATO scrambles to close it and stop BILLIONS from being lost ABC radio presenter claimed rent in tax return ATO is scrambling to close the loophole READ MORE: Meet the WFH mum who beat a major Aussie bank By SARAH BROOKES - SENIOR REPORTER, AUSTRALIA Published: 22:07 GMT, 2 November 2025 | Updated: 22:41 GMT, 2 November 2025 The Australian Taxation Office is scrambling to close a loophole that allowed an ABC radio presenter to claim thousands of dollars in rent on his tax return while working from home. The ATO is urgently challenging the controversial decision by the Administrative Appeals Tribunal, which has sparked fears within government circles that it could cost taxpayers billions in similar claims. The ruling allows Melbourne sports presenter Ned Hall to claim $5,878 in rental deductions for converting his second bedroom into a home office during the pandemic. In the tribunal case, Mr Hall claimed the occupancy costs of a second bedroom in his apartment after being forced to work from home under Victoria's State of Emergency rules during the 2020-21 financial year. His claim was initially blocked by Taxation Commissioner Rob Heferen but was later upheld by the Administrative Appeals Tribunal, allowing him to successfully claim the rental expenses for his permanent office in his second bedroom, along with $1,148 in car costs for travel between his home and work office. The ATO has published interim advice warning people against trying to claim similar deductions as it scrambles to close the loophole fearing a flood of claims in the future. It warned that if anyone receives a deduction based on that claim, they could have to pay more tax if the decision was overturned. The decision is currently subject to appeal in the Federal Court of Australia. ABC sports presenter Ned Hall (pictured) successfully challenged the ATO over his right to claim rent while WFH at his Melbourne home during the COVID-19 pandemic Tax experts warned if upheld, the decision could open the floodgates for similar claims nationwide, potentially wreaking havoc on the federal budget. University of New South Wales associate professor of taxation law, Dale Boccabella, said the Federal Court case 'will have significant implications.' 'It's a straight-out matter of getting a deduction for basically part of your home,' he told the Herald Sun. 'But you've really got to set aside the place, and no one else in the family really uses it in a substantial way.' He said the ATO was clearly concerned about the implications. 'The ATO, I know for a fact, has been really strong on fighting this, and their public comments on this occupancy issue are very strong. They don't really want people to satisfy this rule.' Mr Heferen said as a general rule, expenses associated with a taxpayer's home, such as rent, are of a private or domestic nature and do not qualify as deductions for taxation purposes. 'An exception to this general rule is where part of the home is used for income-producing activities and has the character of a place of business, and the expense loses its essential character as private or domestic,' he said. The ATO is challenging the decision in the Federal Court (pictured), fearing it could trigger a flood of similar claims from taxpayers 'Subject to the outcome of the appeal, in our view, the mere fact that a room in the house has been set aside during the circumstances of COVID-19 lockdowns for work purposes is not sufficient to enable a deduction for a portion of the rent.' Mr Hall relocated to Melbourne with his wife in June 2020 and rented the two-bedroom apartment in his own name. The second bedroom was to be used as a place for him to work from home. Prior to moving to Melbourne, Mr Hall was told by his manager that he would need to work from home when he moved there. During the relevant income year, Melbourne was subject to mandatory lockdowns due to the Covid pandemic. Mr Hall contended it was beyond his control where he worked, and he had to do the majority of his work from home and could only perform part of his employee duties at the ABC's Southbank Studios. The Tribunal ruled against the Taxation Commissioner, determining Mr Hall's second bedroom was his main workplace for the year, making the occupancy expenses deductible, as they were necessary for work and not purely domestic. The ATO has published an interim decision impact statement that provides the ATO’s view on the tribunal decision pending the finalisation of the appeal process. Share or comment on this article: Huge WFH loophole exposed after Aussie scores astonishing win - as the ATO scrambles to close it and stop BILLIONS from being lost Add comment
