It is largely due to more people working from home, and generally not travelling at all, during COVID19 lockdowns – and work-related claims should reflect this.
Assistant Commissioner Tim Loh acknowledges the pandemic has significantly changed people’s work habits, with valid reasons why some claims will go up due to working at home expenses.
But car and travel claims are unlikely to be among them.
“If you are working at home, we would not expect to see claims for travelling between worksites, laundering uniforms or business trips,” said Mr Loh.
Around 8.5 million Australians claimed about $19.4 billion in worked-related expenses in 2020 tax returns. Last year the value of car and travel expenses decreased by nearly 5.5%.
However, the ATO says there was a slight increase of around 2.6% in clothing expenses, driven by frontline workers reaching out for things like hand sanitiser and face masks for the first time, despite uniform and laundry claims dropping lower.
“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. Particularly where someone’s deductions are much higher than others with a similar job and income,” said Mr Loh.
“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.”
“But we know some of these unusual claims may be legitimate. So, if you explain your claim with evidence, you have nothing to fear.”
“We will be sympathetic to legitimate mistakes where good faith efforts have been made. But if we spot people deliberately claiming things they’re not entitled to, we will take firm action,” Mr Loh said.
The ATO needed to shift focus during 2020, getting supporting businesses with COVID-19 stimulus benefits, but you can expect addressing overclaiming of work-related expenses will now be a focus as tax time draws near.
Taxpayers can find out how COVID-19 has changed work-related expenses – including working from home, personal protective equipment, clothing, self-education and travel expenses – on the ATO website: www.ato.gov.au
