Taxation Services – ATO Case Study – Wrongly claiming work related expenses – always check with your accountant/tax agent – like Stellar Accounts if you are unsure.
A sales consultant made claims for work-related car, clothing and other expenses. She claimed more than $3,000 for work-related clothing, but said she realised her suits did not have a logo after the ATO contacted her. The claim was disallowed because her clothing was not a distinctive uniform or specific to her occupation.
She was also unable to confirm she was required to use her car for work and requested that the ATO did not contact her employer, and couldn’t provide evidence for her claim, so the ATO disallowed over $6,000 in work-related car expenses.
The consultant also claimed ‘other work-related expenses’ related to food consumed in the workplace by customers and colleagues, and gifts given to customers and colleagues, including underwear, toiletries and a shoe rack. The ATO disallowed these claims as well, because she could not prove she needed to incur these expenses to earn her income.
In the end, the consultant had to pay back over $8,000 in tax and received a penalty for being reckless in preparing her return.
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