Excerpt from speech by Jennie Granger, Second Commissioner of Taxation at the CPA Australia (NSW) Public Practitioners Conference:
Work-related expenses continue to be an area requiring attention from us.
Deductions for work-related expenses are one of the largest categories of claims made in tax returns.
We are concerned that the difficult times may tempt more people to inflate their claims.
As of May 2009, we had carried out more than 5400 audits and reviews this financial year, resulting in a total of $9.7 million raised.
In selecting our work, we will as usual focus on:
- occupations with a pattern of large and/or rising claims
- returns which do not fit the pattern for a particular occupation, and
- claims in returns lodged by tax agents that are outside the norm for their client base.
Based on our profiling this year we will be focussing on people employed as:
- truck drivers
- sales and marketing managers
- sales representatives, and
- electricians.
The most common incorrect claims by people in these occupations include:
- insufficient documentation available to support motor vehicle and travel expenses
- claiming the Living Away from Home Allowance without proper documentation and verification from the employer that the claimant must live away from home as a condition of their employment
- motor vehicle expenses on the basis that the claimant is carrying bulky equipment required for work. It’s important that the claimant can verify that their employer requires them to carry this equipment as part of their employment and there is no alternative storage solution at the workplace, and
- home offices, mobile phone and internet expenses.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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