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:
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.
In the 2019–20 Budget, the government announced that Single Touch Payroll (STP) would be expanded to include additional information.
Throughout March, the ATO sent letters to directors who are potentially in breach of their obligations to ensure that the company they represent has met its PAYG withholding, superannuation guarantee charge, or GST obligations.
It’s a great headline isn’t it? Spend $100 and get a $120 tax deduction. Days after the Federal Budget announcement that businesses will be able to claim a 120% deduction for expenditure on training and technology costs, we started receiving marketing emails encouraging us to spend now to access the deduction.