Overall, around 8.5 million Australians claimed nearly $19.4 billion in work-related expenses in their 2020 tax returns. But this year, the ATO is expecting work-related expenses to decrease to reflect a significant reduction in travel expenses.
At the same time, assistant commissioner Tim Loh acknowledged that given the pandemic has altered work habits, some expenses could in fact increase.
But car and travel claims are unlikely to be among them.
“If you are working at home, we would not expect to see claims for travelling between work sites, laundering uniforms or business trips,” Mr Loh said.
Last year, the value of car and travel expenses decreased by nearly 5.5 per cent.
However, the ATO said there was a slight increase of around 2.6 per cent in clothing expenses, driven by frontline workers reaching out for things like hand sanitiser and face masks for the first time, despite uniform and laundry claims dropping lower.
“While it’s good to see most people have been doing the right thing, our data analytics will be on the lookout for unusually high claims this tax time, particularly where someone’s deductions are much higher than others with a similar job and income,” Mr Loh said.
“We will also look closely at anyone with significant working-from-home expenses that maintains or increases their claims for things like car, travel or clothing expenses.
“You can’t simply copy and paste previous year’s claims without evidence.
“But we know some of these unusual claims may be legitimate. So, if you explain your claim with evidence, you have nothing to fear.
“We will be sympathetic to legitimate mistakes where good-faith efforts have been made. But if we spot people deliberately claiming things they’re not entitled to, we will take firm action.”
While addressing inflated work-related expenses wasn’t top of the ladder for the ATO last year, given its close involvement in the distribution of the government’s various COVID packages, this year the Tax Office is shifting its focus back to tax.
Taxpayers can find out how COVID-19 has changed work-related expenses — including working from home, personal protective equipment, clothing, self-education and travel expenses — on the ATO website at www.ato.gov.au.