Honesty the best policy with ATO
TASMANIANS are being warned to be vigilant when lodging their tax returns for the 2017-18 financial year in light of the Australian Taxation Office’s crackdown on people illegitimately claiming work-related expenses.
At a time when many Tasmanians are busy filling out their tax returns, national taxation expert Michael Croker has warned those who either advertently or inadvertently misreport workplace expenses could face reprimands from the ATO.
Mr Croker, the Australian Tax Leader for Chartered Accountants Australia and New Zealand, is sharing tax knowledge with the organisation’s Tasmanian members.
“Australia is a low-wage-growth society and in Tasmania, with living expenses on the rise – and the state’s soaring rental prices, it can be tempting to gild the lily and go for a larger refund on your tax return,” Mr Croker said.
Mr Croker said new figures released by the ATO on the “individual tax gap” was the reason behind this year’s crackdown on people claiming work-related expenses that they were not entitled to.
The ATO has estimated the individual tax gap at 6.4 per cent or $8.76 billion for 2014-15.
The individual tax gap represents the difference between the total amount of tax collected and the amount the ATO would collect if every individual not in business were fully compliant with the law.
“One of the main contributors to this tax gap is people over-claiming deductions for work-related expenses, particularly car, work uniforms and education costs,” Mr Croker said.
“Those who lodge their own tax returns online will find more ‘prompts’ questioning claims, and certain triggers might see your return up for review.’'
Mr Croker said while tax agents had a responsibility to ensure the law was followed, the onus of compliance was with the individual when lodging a return through an accountant.