It❜s Tax Time! Who❜s On The ATO❜s Naughty List This Year?

  • Parents Only

By: Alex Harmon, ellaslist

You better watch out, you better not cry, you better not shout (your mates too many drinks tonight) I'm telling you why - the tax man is coming to town! That's right, it's end of financial year Christmas and the Australian Tax Office is making a list and checking it twice. Want to know who they're going after this year? 

The Taxpayer Naughty List

According to Mark Chapman, director of tax communications with H&R Block, people earning extra income through platforms like Uber and Airbnb should expect some extra attention on their tax returns. 

“The main thing to be aware of is if you’re in the sharing economy, driving an Uber or renting an Airbnb, you do have tax obligations,” Mr Chapman said. “There are a surprising number of people who don’t realise. You can also claim tax deductions as well, so it’s not all bad news.”

Mr Chapman said the ATO was obtaining taxpayers’ financial information from third parties such as the banks or the sharing platforms themselves, and matching that data with tax returns to identify people who weren’t complying.

Mr Chapman said taxpayers who like to wack on a few 'work-related' expenses will be looked at too. “The ATO has a bit of a focus this year auditing work-related expenses they perceive to be excessive,” he said.

“[Being audited] happens in a minority of cases, so it’s not something that’s likely unless your claims are significantly out of line with a typical claim, but it’s probably not worth taking the chance."

A Few Sneaky Deductions Won't Hurt, Will It?

You wouldn't be the first person to claim $100 on a uniform that has come from your own wardrobe or $299 some educational textbooks that you never actually bought, but Assistant Commissioner Kath Anderson said the ATO is watching you this year. They are using real-time data to compare taxpayers with others in similar occupations and income brackets, to identify higher-than-expected claims related to expenses including vehicle, travel, internet and mobile phone, and self-education.

“Many taxpayers don’t have a good understanding of what deductions they can claim, and believe they can claim for items which they in fact can’t,” she said.

“Some taxpayers even think that you can make a standard claim of $300 without having spent the money. You don’t need receipts for claims up to $300 but you must have actually spent the money, and be able to show us how you worked out your deduction if asked.”

So what about the old sneaky uniform deduction? “It’s a myth that you can claim everyday clothes, for example, black pants and a plain white shirt, even if you only wear them to work, and your employer says you have to,” Ms Anderson said.

“To legitimately claim your uniform, it needs be unique and distinctive, such as a uniform with your employer’s logo, or be specific to your occupation and not for everyday use, like chef’s pants or coloured safety vests.

“It sounds like a small thing, but we aren’t talking about small sums of money here. There are 13 million taxpayers, so if everyone over claims even $100 that adds up to a lot.”

If In Doubt, Take These Deductions Off Your Tax Form 

According to the ATO, these are the biggest mistakes most people make. If you're not sure about whether you can claim then, then you probably can't. Here are the ATO's 11 Commandments: 

1. Trips between home and work. Sadly this is generally considered private travel.

2. Your ute because you carry bulky tools or equipment. The only time this is okay is if you need to use your bulky tools to do your job; your employer requires you to transport this equipment; or there is no secure area to store the equipment at work.

3. Car expenses that have been salary sacrificed.

4. Meal expenses for travel, unless you were asked to work away from home overnight.

5. Private travel. This is when you get offered a work trip and tack on some leisure leave of your own. You can only claim the work-related portion.

6. Everyday clothes you bought to wear to work (eg, a suit or black pants), even if your employer requires you to wear them.

7. A flat rate for cleaning eligible work clothes - unless you are able to show how you calculated the cost.

8. Higher education contributions charged through the HELP scheme.

9. Self-education expenses unless the study is direcly contributing to your job. 

10. Private use of phone or internet expenses — only the work-related portion counts.

11. Upfront deductions for tools and equipment that cost more than $300. However, you can spread your deduction claim over a number of years. That’s called depreciation.

So there you have it, don't get caught with any dodgy deductions - you can't say we didn't warn you!