The Australian Taxation Office (ATO) issues warning for false tax claims for clothing and laundry work-related expenses.
Last year, claims on clothes and laundry bills by about six million taxpayers amounted to nearly $1.8 billion. This year, the ATO made it clear that they are going to take a closer look at tax claims and investigate their validity.
Currently, taxpayers can claim tax deductions for expenses for buying and cleaning occupation-specific clothing. Any tax claims over $150 should be substantiated by receipts and other written evidence. Anything below, tax claimants are not required to keep records of.
ATO assistant commissioner Kath Anderson sets the record straight:
“Just to be clear, the $150 limit is there to reduce the record-keeping burden, but it is not an automatic entitlement for everyone.”
“While you don’t need written evidence for claims under $150, you must have spent the money, it must have been for uniform, protective or occupation-specific clothing that you were required to wear to earn your income, and you must be able to show us how you calculated your claim,” Ms. Anderson said.
It pays to learn what you can claim.
While the ATO believes that some of the claims are caused by common mistakes and the hasty assumption that the expense falls under a standard deduction, they are also aware that some are deliberate false tax claims.
They are concerned about the number of taxpayers claiming deductions for ‘conventional clothing.’
Karen Foat said, “Your workplace may expect you to wear clothing items like suits or black pants, but an official ‘dress code’ doesn’t qualify as a uniform and you can’t make a claim for normal clothing, even if your employer requires you to wear it, or you only wear it to work.”
Ms. Foat said they won’t be ignoring false tax claims just because the amount is small. Those small amount of tax claims can pile up. She said, “No matter how small, it’s not OK to expect other Australians to pay for your dodgy claims.”
“The ATO will be taking strong action this tax time to protect honest taxpayers who are claiming the right amount — no more and no less.”
So this year, the ATO will focus on false claims for clothing and laundry expenses. False claims will be removed. But for those who are knowingly lodging false tax claims, ATO has this to say:
“If we do find that people are deliberately pushing the boundaries, then they [will] not only have their claims removed but they can face penalties.”
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