Top Tax Tips - 12 September 2018

Work-related expenses 

Taxpayers that are over-claiming work-related expenses (e.g. vehicle, travel, clothing, working from home and self-education expenses) are on the ATO’s hitlist.

Although there is a myriad of issues involved when claiming work-related expenses, the main three rules are:

1. Only claim a deduction for money actually spent (and not reimbursed);
2. The work related expense must directly relate to the earning of income; and
3. An employee must have a record to prove the expense.

Applying these principles to the most common occupations claiming work related expenses:

• Hospitality workers and retail workers will not be entitled to a deduction for home to work travel even if they have to work overtime;
• Building and construction workers will not be entitled to a deduction for the cost of workwear and boots that are not part of an unique or distinctive uniform or are arguably not designed to provide sufficient protection from the risk of injury;
• Flight attendants and retail workers will not be entitled to a deduction for grooming products (e.g. hairdressing and cosmetics) even if an allowance is paid;
• Ordinary police will not be entitled to a deduction for the cost of fitness programs.  However, police involved in special operations (i.e. requiring a level of fitness well above ordinary police standards) will be allowed a deduction for such fitness programs;
• Teachers will not be entitled for a deduction for gifts or prizes bought for students; and
• Truck drivers may claim for accommodation, meal and incidental expenses incurred while travelling away from home overnight for work.  If overtime meal expenses claimed are less than a reasonable amount determined by the ATO each year (i.e. $30.60 per day for 2019 and $55.30 per day for 2018), substantiation (i.e. written records of the meal expense) is not required – however, if the tax deduction claimed is more than the reasonable amount, the whole claim must be substantiated (not just the excess over the ATO’s reasonable amount).

Watch out for fraudsters

During tax time, there is usually a sharp spike in the number of email and telephone scams doing the rounds (e.g. a fraudster, claiming to be from the ATO, may call you and request some personal information or demand payment of an outstanding tax debt).

There is currently a tax scam going around where individuals are called directly and a recording is then played threatening them that a warrant is out for their arrest (and police on the way) for outstanding tax debts.  The hoax phone call further attempts to trick the individual to call a specific number to speak to an “alleged” tax agent to clear up the alleged problem.

If you receive any such suspicious phone calls, please do not provide any information.  We would strongly suggest that you hang up immediately (if contacted by phone) and contact us as soon as possible so that we can bring this to the attention of the ATO.  We have already been in contact with the ATO regarding this scam.

Please also be aware that your Nexia advisor can, at any time, ascertain what taxes are owed and the relevant payment date(s).  If you are unsure about the amount of tax you owe, please check with your Nexia advisor before payment.