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Tax Accountant Hobart

ATO to crack down on travel, clothing claims for home-based workers

Australian taxpayers who continue to claim deductions for the following items — despite working
from home — will find themselves on the ATO’s radar this tax time.

The Australian Taxation Office has warned what they will be putting under scrutiny this year.
The Australian Taxation Office is on the lookout for anyone trying to claim hefty working-from-home
expenses while also maintaining or increasing claims for things like car, travel or clothing expenses.

The ATO had to shift focus last year on getting stimulus benefits out the door as quickly as possible
but warns it will return its attention to overclaiming work-related expenses this tax time, noting the
pandemic had changed people’s work habits.

“We know many people started working from home during Covid-19, so a jump in these claims is
expected,” assistant commissioner Tim Loh said.

The ATO is on the lookout for people claiming substantial travel expenses despite working from
home during the pandemic.

“But, if you are working at home, we would not expect to see claims for traveling between
worksites, laundering uniforms or business trips.

“You can’t simply copy and paste previous year’s claims without evidence.”

The ATO’s data analytics will also be on the lookout for claims where someone’s deductions are
much higher than others with a similar job and income. Last year, the value of car and travel
expenses decreased by nearly 5.5 percent, but there was a 2.6 percent rise in uniform and laundry
claims, driven by frontline workers’ first-time need for products like hand sanitizer and face masks.

ATO assistant commissioner Tim Loh warns firm action will be taken against people deliberately
making claims they are not entitled to. “We know some of these unusual claims may be legitimate.
So, if you explain your claim with evidence, you have nothing to fear. We also want to reassure the
community that we will be sympathetic to legitimate mistakes where good faith efforts have been
made.,” Mr. Loh said.

There is a simple formula for working-at-home expenses rather than listing specific costs such as
power bills.

WORKING FROM HOME EXPENSES:

The temporary shortcut method for working-from-home expenses is an all-inclusive rate of 80 cents
per hour for every hour worked from home. Keep a record such as a timesheet, roster, or diary entry
that shows the hours you worked. If you want to claim part of an expense of more than $300, such as a
desk or computer in future years, you need to keep your receipt.

PERSONAL PROTECTIVE EQUIPMENT:

If your duties require physical contact or proximity to customers or clients, or your job involves
cleaning premises, you may be able to claim items such as gloves, face masks, sanitizer or
antibacterial spray. This includes industries like healthcare, aviation, hair and beauty, retail and
hospitality.

You will need to have purchased the item for use at work, paid for it yourself and not been
reimbursed. You also need a record, preferably a receipt, to support your claim.

CLOTHING, SELF-EDUCATION AND TRAVEL EXPENSES:

The value of claims for work-related non-PPE clothing and self-education fell last year as a result of
travel restrictions and limits on the number of people who could gather in groups, a trend the ATO
expects to continue in 2021 tax returns.

Employees who work from home due to Covid-19 but sometimes need to travel to their regular
the office cannot claim the cost of travel from home to work, as these are still private expenses.

Author

KPG Taxation