ATO to Crackdown on Dodgy Claims

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ATO to Crackdown on Dodgy Claims

With tax time fast approaching, Australians can expect letters from the Australian Taxation Office, as they focus on closing the $8.7 million tax gap.  Dodgy claims including dry cleaning and car expenses will once again be closely monitored, along with investment property deductions and earnings from cryptocurrencies and sharing economy platforms such as Uber.  

 H&R Block’s director of tax communications, Mark Chapman believes that the intensity of focus (from the ATO) is going to be different this year. 

“The ATO has been given additional resourcing by the Government to back up the work they’re doing in relation to noncompliance. I think we’ll see far more audits and more letters in relation to incorrect claims around work-related expenses and property, and we’ll see far more data-matching around cryptocurrency and the sharing economy.” 

Last tax time, thousands of Australians received letters as claims were flagged as unusual, or by the ATO discovering undeclared income. 

“An audit is really just one component,” Chapman said. “They do a lot of investigation in this space through technology – they data-match, they have benchmarks, if expenses are outside the norm people will get a letter which is not a full audit, it invites them to think again.” 

Figures of deliberate attempts to over-claim can attract penalties of up to 75 per cent of the claim.  

Work expenses to watch 

  • Claims for work-related clothing, dry cleaning and laundry expenses. 
  • Deductions for home office use, including claiming for ‘occupation’ costs like rent, rates and mortgage interest, which are not allowed unless you’re actually running a business from home. 
  • Overtime meal claims 
  • Union fees and subscriptions 
  • Mobile phone and internet costs, with a particular focus on those who claim the whole bill. 
  • Motor vehicle claims where taxpayers take advantage of the 68 cent per km flat rate available for journeys up to 5000km.  
  • Incorrectly claiming deductions of $300 or less without receipts.  

Find more information on deductions you can claim for here

To see how an outsourced payroll solution can streamline your payroll process, contact PaysOnline today.


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