The ATO has stated that it is looking very closely at work related deductions that are being claimed. If you are claiming your
expenses, there are three methods you can use:
The ATO has highlighted four ineligible expenses that are being claimed:
CASE STUDY
A recent case before the AAT shows how determined the ATO is to crackdown on work related deductions being claimed where there is not a
satisfactory connection between the expense being claimed and the taxpayer’s work.
In this case, the taxpayer had claimed car and clothing expenses, and home internet and mobile phone costs.
The ATO conceded the car costs but on a reduced deduction.
When it came to clothing expenses the ATO conceded that a deduction could be claimed for gloves and a beanie on the basis that the taxpayer
worked in cold conditions and that these were protective clothing needed for the job. However, the AAT refused to allow a deduction for the
cost of a pair of socks on the basis that they were not protective in nature in their own right – yes, it really does get this detailed.
The taxpayer had also claimed 100% of his home internet expenses but the ATO reviewed this claim and reduced the deductible amount to $50 - a
record of the family’s home internet usage demonstrated the internet was used to browse Facebook amongst other non-work related sites.
One of the other issues to come out of this case was the importance of record keeping. If you are going to claim work related expenses, then
ensure you have the records to prove your claim.
Get in touch with our team for strategic tax advisory. we're available by phone on 03 5911 7000 or contact us
online.
At the end of each financial year, your accountant prepares essential documents like financial statements, tax returns, and compliance reports. But what brings it all together? That’s where the Management Letter comes in.
Treasury has released exposure draft legislation for Payday Super that will require employers to pay superannuation at around the same time as salary and wages are paid to the employee. The changes are proposed to commence from 1 July 2026.
