THE ATO IS CLOSELY EXAMINING WORK-RELATED CAR EXPENSES

The ATO has announced that it will be closely examining claims for work-related car expenses in 2018 tax returns. The ATO is concerned about taxpayers making mistakes or deliberately lodging false claims in relation to work-related car expenses. Last year, around 3.75 million people made a work-related car expense claim, totaling about $8.8 billion.

ATO Assistant Commissioner Kath Anderson said that this year, the ATO will be particularly focused on people “claiming things they’re not entitled to”. This will include people claiming things like home-to-work travel or other private trips, trips they didn’t actually undertake, or expenses their employer has already paid for or reimbursed.

The ATO also uses analytics to identify claim patterns. For example, Ms Anderson said the ATO knows that around 870,000 people claim exactly 5,000 kilometres of travel under the cents-per-kilometre method each year. While the ATO says it is not suggesting that all of those claims are wrong, “it is something that we’ll be able to look into”.

The Assistant Commissioner said the best way for taxpayers to avoid mistakes is to make sure they follow “the three golden rules”, only making a car claim if:

•       you paid for the expense yourself and you weren’t reimbursed;

•       it’s directly related to earning your income – in other words, your employer required you to make the trips as part of your job; and

•       you have a record to support your claim.

If you would like to know more please contact one of our accountants on 07 4639 1099 or come in and see us at 14 Russell Street Toowoomba.