ATO warns against incorrect claims for work-related expenses

The ATO is warning taxpayers to avoid incorrect claims for work-related expenses. Assistant Commissioner Kath Anderson noted that the ATO is using real-time data comparing taxpayers in similar occupations and tax brackets, which will enable them to identify higher-than-expected deductions claims.

The ATO notes in particular that:

• although receipts are not required for claims up to $300, it is a requirement that the taxpayer actually spent the money claimed, and taxpayers need to be able to demonstrate how they calculated a deduction of up to $300 if no receipts are retained
• it is not generally allowable to claim a deduction for everyday clothes even if the style of clothes is specified for the employer and the clothes are only worn for work – to qualify for an allowable deduction, the clothes must be unique and distinctive (eg a uniform with the employer’s logo) or specific to the occupation and not suitable for everyday use (eg chef’s pants or coloured safety vests)