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ATO warns against incorrect claims for work-related expenses

Posted by Northadvisory on June 27, 2017

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)
• most employees will not be able to make claims for:

o travel expenses for travel between home and work
o car expenses for transporting bulky tools or equipment (unless the tools are needed for the job and the employer requires the employee to transport them)
o car expenses that have been salary sacrificed
o meal expenses for travel, unless the employee was required to work away from home overnight
o the private portion of a trip that is both for work and for private purposes
o private use of phone or internet expenses, or
o self-education expenses for future or “dream” jobs”

If you have any questions in regards to claiming work related deductions, please do not hesitate to contact us.

Martin van der Saag
Director
T: 02 9984 7774
E: martinv@northadvisory.com.au

Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au