ATO warning on false claims
WORKERS are getting themselves in hot water with the Australian Taxation Office by over-claiming deductions for their phones, internet use, home office and other work-related expenses. The early warning to taxpayers comes in response to a record $7.9 billion of deductions last year for “other workrelated expenses.”
WORKERS are getting themselves in hot water with the Australian Taxation Office by over-claiming deductions for their phones, internet use, home office and other workrelated expenses.
The ATO is delivering an early warning to taxpayers – months before tax returns are due – in response to a record $7.9 billion of deductions last year for “other work-related expenses”, a category that covers all work costs other than car, travel, clothing and selfeducation.
It has emailed 1.3 million of the 6.7 million taxpayers who last year claimed these deductions, and since July 2016 has adjusted $100 million of incorrect work-related claims.
ATO assistant commissioner Kath Anderson said: “It’s not OK for someone to expect the rest of us to pay for their private expenses.”
Ms Anderson said a major issue was people claiming 100 per cent of costs for expenses such as phone or internet use when they should instead be apportioned be- tween work and private use.
The ATO is contacting both individual taxpayers and tax agents, and is using hi-tech analytics to spot false claims and is talking with employers.
“We are seeing mistakes in this particular item and we are seeing them in both self-prepared returns and returns prepared by tax agents. The agent can only work with what the individual tells them,” Ms Anderson said.
Tax specialist and Deakin University associate professor Adrian Raftery said ATO penalties could be up to 75 per cent of the shortfall amount plus an interest charge of 8.72 per cent.
Dr Raftery said many taxpayers did not know what they were able to claim, or understand the personal versus private use component.
“By all means go right to the boundary, but don’t go over it,” he said.