Level 4, 20 Grenfell Street,
Adelaide SA  5000

Phone: 08 8231 1888
Fax: 08 8231 3888

Email: admin@crase.com.au





 
Latest News
Hot Issues
Small businesses may ‘collapse under strain of payday super’, IPA warns
ATO’s hands tied with scrapping on-hold debts, expert says
What Drives Your Business Growth and Profits?
Australian Taxation Office (ATO) shifting to firmer debt collection activity
Why employee v contractor comes down to fine print
Sharing economy reporting regime for platform operators
Countries producing the most solar power by gigawatt hours
Illegal access nets $637 million
Accessing superannuation benefits.
Does your business have a company Power of Attorney?
Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
GrantConnect
2 in 3 SMEs benefit from instant asset write-off, survey reveals
Updated guidance on R&D claims
Do you know how to recover debts?
Wheat Production by Country
Types of small business benchmarks
What is a Commercial Lease?
ATO warns advisers against suspect R&D tax claims
The year of workplace law upheaval
How to Resolve Invoice Payment Disputes
Raft of revenue tweaks in MYEFO to raise millions
The Countries that Export the Most Wine in the World
Record low invoice values ‘reveal inflation sting’
A 2023 Advent Calendar for our clients
Average refund plummets by $580, total payout down $5.4bn
FBT – Christmas Parties and Taxi Fare/Rideshare
Articles archive
Quarter 4 October - December 2023
Quarter 3 July - September 2023
Quarter 2 April - June 2023
Quarter 1 January - March 2023
Quarter 4 October - December 2022
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Tax Office reveals adventurous, dubious claims ahead of tax time

The ATO has released several case studies of adventurous and misguided expenses claims from taxpayers, but some fear they’re being made an example of because the Tax Office cannot “audit their way out” of a large-scale expenses crackdown.



       


 


The Tax Office has embarked on a large-scale education campaign in the build up to tax time 2018, and has specifically placed work-related clothing and laundry claims on notice after a 20 per cent rise in claims over the last five years, with 6 million people claiming nearly $1.8 billion in laundry expenses last year.


In a bid to showcase examples of incorrect claims, the ATO has released several case studies, including one advertising manager who claimed $1,854 for clothing purchased at popular fashion retail stores to wear at company work functions and awards nights. Her claim was disallowed in full and a penalty issued for failing to take reasonable care.


Further, a car detailer claimed over $20,000 of work related laundry expenses over two years on the basis of calculating the expenses at the rate of $226 per hour, as he “valued his personal time”.


He then made a voluntary disclosure that saw his deductions disallowed, with no penalties applied because of the disclosure before the ATO’s audits progressed.


Conversely, a lab technician claimed $2,500 for the cost of purchasing protective boots and laundering his work uniform but failed to keep any receipts to verify his claim, resulting in a reduction to $144, using the ATO’s reasonable basis.


Speaking to Accountants Daily, the Institute of Public Accountants general manager of technical policy, Tony Greco, said the examples given show that the ATO is trying to influence taxpayers’ behaviour ahead of tax time.


“The dilemma that the Tax Office has is that they can't audit their way out of this problem, all they can do is look at the outliers and hope that by reporting that, that they change community behaviours,” said Mr Greco.


“They are well and truly above what most people would consider reasonable.


“We don't know if these are agent prepared returns or whether they are self-preparers and the question that needs to be asked is do these types of claims go through agents? If the answer is yes then I would find that unusual that an agent would find this acceptable.”


ATO commissioner Chris Jordan had earlier claimed that incorrect claims were more rampant in agent-prepared returns compared with self-prepared returns.


However, H&R Block director of tax communications Mark Chapman believes tax agents would not possibly allow such bold claims to pass.


“As tax agents, it’s our job to make sure that clients claim everything they’re entitled to but equally that they don’t claim what they’re not entitled to,” said Mr Chapman.


“As such, the claims we see are all legitimate and I’d expect that any reputable tax agent would report the same. The bigger risk is probably through self-lodged returns where there is a bigger danger in taxpayers misinterpreting the law and making an inaccurate claim.”


 


By: Jotham Lian
​18 JUNE 2018
www.accountantsdaily.com.au




22nd-July-2018
      Site By AcctWeb