ATO warning issued about ‘dodgy claims’

The Australian Taxation Office has warned that it will be focusing its resources on ‘dodgy claims’ in 2018. The particular area it will be paying extra scrutiny to is work related expenses and it says that more than 360,000 reviews will be conducted this year.

The ATO has published a warning for tax professionals saying;

This year we are paying close attention to what people are claiming as ‘other’ work-related expense deductions.

Before you include claims for work-related expenses at label D5 this year, make sure your clients can show:

  • they spent the money themselves and were not reimbursed
  • the expense was directly related to earning their income
  • they have a record to prove it.

Adam Kendrick, who is the ATO’s assistant commissioner, says that that the move to combat dodgy claims arises from the discovery in recent years of ‘widespread incorrect deductions for things such as mobile phones, uniforms and car expenses’.

The ATO’s newly improved data matching capabilities are set to also increase the risk of an audit for many individuals.

Graeme Ingles, Managing Director of Ingles Accounting, says that the ATO’s spotlight on work expenses claims may result in people reducing their deductions, perhaps unnecessarily.

The 2018-19 Federal Budget released earlier this month included extra funds for increasing the ATO’s data matching capabilities – so it has never been a better time to use an accounting for both personal and business taxes.

To learn more about what deductions you can legitimately claim, contact us on 07 5571 4900.