ATO’s drive to catch false work car claims
INCORRECT tax deductions for work-related car use are putting many Australians on a collision course with the Australian Taxation Office.
The latest ATO data shows almost a quarter of taxpayers claim car deductions despite many not being entitled to do so.
The ATO is issuing a fresh warning as its technology becomes more sophisticated at catching cheats.
Even the 5.4 million people who have lodged returns this year risk being caught if they made dodgy car claims.
“There’s ongoing evidence people are making mistakes in their workrelated car expenses,” ATO assistant commissioner Kath Anderson said.
Ms Anderson said the highest number claiming car-related deductions were managers, sales and marketing employees, teachers, office workers and carers.
Many claim travel between home and work, which is generally not deductible. Some claim car use for transport of bulky tools when their tools are not bulky enough.
Others are potentially pocketing illegal deductions of up to $3300 by using the popular 66c a kilometre claim for travel up to 5000km that does not require a logbook.
They are claiming up to the limit without showing how they calculated it.
“There’s no such thing as a free pass when it comes to deductions,” Ms Anderson said. “People might think they have a few folders to carry and that qualifies as bulky tools, when in fact that’s not the case.”
Tax specialist Andrea Michaels, managing director of NDA Law, said innocent mistakes would probably result in having to pay back the debt plus interest, but knowingly making false statements “put you into a 75 per cent penalty regime, plus interest, and their interest rates are pretty high”.
Ms Michaels said the ATO had become better at comparing people’s claims against others with similar occupations and incomes.
The latest deductions data shows more than three million people made workrelated car expense claims in 2015-16.
The ATO undertook 450,000 reviews of tax returns and people were forced to pay back $1 billion.