"You can't be in two places at once": ATO boss warns of new tax crackdown
As our lives have changed quite a bit over the past two years, the ATO has warned one particular group of Australians are not reflecting this change when processing their tax returns.
The ATO says Australians who drive to work have become accustomed to filing a number of expenses for their car, but those types of expenses could land them in trouble this year.
In an interview, the ATO assistant commissioner Tim Loh said it would be looking very carefully at car-related expenses this tax time.
“What we are seeing is people continuing to claim car and travel expenses at pre-pandemic levels,” he said.
“We do expect car and travel expenses to go down quite significantly because if you’ve been working from home, you can’t be at two places at once.”
According to the ATO, travel to and from work cannot be claimed as a tax deduction but petrol costs for trips to a job-related task can be submitted.
If you are to be audited, you will have to prove to tax officials you used your car for work, and not just to buy groceries or visit your mates.
The ATO is preparing to crack down on Australians who are over-claiming work-related expenses to help with the rising cost of living.
One of the steepest rises in everyday goods is in petrol prices. We’ve seen them hit record highs in recent months as the war in Ukraine squeezes supplies.
With the national petrol price at 211.9 cents a litre, CommSec calculated an average Aussie family spent $296.66 a month filling up their car – just shy of the recent record high of $297.50 in May. It means that the average monthly fuel bill has increased by $74.48 compared to the beginning of 2022.
However, It’s not just motoring expenses the ATO will be keeping a close eye on. Rapid antigen tests are also an area the ATO will be looking at.
He said Australians who claimed rapid antigen tests on their tax return would also need to prove it was work-related and not for personal use.
“Now with those rapid antigen tests used for work purposes, you need to satisfy three rules: you must have spent the money yourself and not be reimbursed by your employer,” Mr Loh said.
“It must be related for work-related purposes.”
Big change to work-from-home expenses
After the lockdowns of the past 12 months, many of us will be claiming deductions for working from home. The good news is that this year, there is still an easy system in place for working out how much you’re owed.
Since the pandemic began in March 2020, professionals have been able to claim a flat 80 cent-an-hour rate for their expenses instead of having to manually add them up.
The flat-rate was meant to have ended on June 30, 2021 but the tax office extended it for another year as Sydney and Melbourne were put into long lockdowns.
That means you can use it on this year’s tax return, which you have until October 31st
to complete.
However, a big change is coming from July 1st, meaning that from the next financial year you will be required to keep your electricity, internet and phone bills and manually add up your expenses to claim a lower 52-cent an hour deduction if you’re working from home permanently.
It basically means that those of us working from home will have to get into the habit of keeping receipts in the new financial year.