The Australian Taxation Office (ATO) is warning taxpayers that it is closely monitoring any work-related claims that they plan to make on their tax returns.
“We know many people started working from home during COVID-19, so a jump in these claims is expected,” Assistant Commissioner, Tim Loh, said. “But, if you are working at home, we would not expect to see claims for travelling between worksites, laundering uniforms or business trips.”
It is reported that around 8.5 million Australians claimed nearly $19.4 billion in work-related expenses in their 2020 tax returns. Car and travel expenses decreased by nearly 5.5 per cent but clothing expenses increased by 2.6 per cent, driven mainly frontline workers’ uniform and laundry claims.
“While it’s good to see most people have been doing the right thing, our data analytics will be on the lookout for unusually high claims this tax time,” Loh said. “Particularly where someone’s deductions are much higher than others with a similar job and income. We will also look closely at anyone with significant working from home expenses, that maintains or increases their claims for things like car, travel or clothing expenses.
“You can’t simply copy and paste previous year’s claims without evidence,” Loh added. “But we know some of these unusual claims may be legitimate. So, if you explain your claim with evidence, you have nothing to fear.”
Loh reassured the community that the ATO will take a sympathetic view of legitimate mistakes made in good faith. However, he warned that if the ATO identify deliberate claims for people things clearly aren’t entitled to, take firm action will be taken.
The ATO recently announced the temporary shortcut method for working from home expenses for the full 2020-21 financial year. This allows an all-inclusive rate of 80 cents per hour for every hour people work from home, rather than needing to separately calculate costs for specific expenses.
For taxpayers whose specific duties require physical contact or close proximity to customers or clients, or if their job involves cleaning premises, the ATO has said they may be able to claim items such as gloves, face masks, sanitiser, or anti-bacterial spray. This applies to those working in industries such as healthcare, cleaning, aviation, hair and beauty, retail and hospitality.
However, an employee working from home due to COVID-19 who needs to travel to their regular office on occasion cannot claim the cost of travel from home to work as the ATO considers such costs as private expenses.