ATO driven to scru­ti­nise car claims this tax time

Wangaratta Chronicle - North East Regional Extra - - News -

THE Aus­tralian Tax­a­tion Of­fice (ATO) has an­nounced that it will be closely ex­am­in­ing claims for workre­lated car ex­penses this tax time as part of a broader fo­cus on work re­lated ex­penses.

As­sis­tant Com­mis­sioner Kath An­der­son said over 3.75 mil­lion peo­ple made a work-re­lated car ex­pense claim in 2016–17, to­talling around $8.8 bil­lion.

“That’s a lot of money and Aus­tralians ex­pect us to en­sure peo­ple are not over-claim­ing,” Ms An­der­son said.

“While most peo­ple want to do the right thing, we know the rules can be a bit tricky for some and we are see­ing a lot of mis­takes.

“We are par­tic­u­larly con­cerned about tax­pay­ers claim­ing for things they are not en­ti­tled to, like pri­vate trips, trips they didn’t make, and car ex­penses that their em­ployer paid for or re­im­bursed.”

There are two ways to cal­cu­late a de­duc­tion for car ex­penses – the cents per km method which is lim­ited to claims for work-re­lated travel up to 5000 kms, and us­ing a log book to de­ter­mine the workre­lated per­cent­age of ac­tual ex­penses in­curred.

Each year around, 870,000 peo- ple claimed the max­i­mum amount un­der the cents-per-kilo­me­tre.

“It’s le­git­i­mate to claim for 5000 kilo­me­tres if you did ac­tu­ally do them as part of earn­ing your in­come. “How­ever, we are con­cerned that some tax­pay­ers mis­tak­enly be­lieve that this is a “stan­dard” de­duc­tion they are en­ti­tled to, with­out need­ing to pro­vide any ev­i­dence of hav­ing trav­elled that dis­tance, or even hav­ing un­der­taken any travel at all,” Ms An­der­son said.

“It’s true that claims of up to 5000 kilo­me­tres us­ing the cents per km method don’t re­quire a log book. “How­ever, you still need to have done the kilo­me­tres as part of your job and be able to show how you cal­cu­lated your claim.”

Ms An­der­son said there are three golden rules for tax­pay­ers to re­mem­ber to get it right.

“One – you have to have spent the money your­self and can’t have been re­im­bursed, two – the claim must be di­rectly re­lated to earn­ing your in­come, and three – you need a record to prove it.”

For more in­for­ma­tion about work-re­lated car ex­penses, visit ato.­ex­penses and to find out about myDe­duc­tions, visit au/myde­duc­tions

TAKE THE WHEEL: Be scrupu­lous with your car re­lated de­duc­tions this tax time.

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