The ATO will be closely examining claims for work-related car expenses this tax time as part of a broader focus on work related expenses.
Assistant Commissioner Kath Anderson said over 3.75 million people made a work-related car expense claim in 2016/2017 totalling around $8.8 billion! "We are particularly concerned about taxpayers claiming for things they aren't entitled to like private trips, trips they didn't make and car expenses that their employer paid for or reimbursed".
Each year around 870,000 people claimed the maximum 5000kms under cents-pre-kilometre. The ATO are concerned that taxpayers mistakenly believe that this is a "standard" deduction they are entitled to. The ATO say "It's true that claims up to 5,000 kms using the centre per km method don't require a logbook. However, you still need to have done the kilometres as part of your job and be able to show how you calculated your claim, for example by keeping a diary of places you have had to drive for work and how often. The cents per kilometre method is there to simplify recordkeeping, not to provide a free ride".
The ATO say that they have improved technology and data analytics which will enable them to identify unusual claims and remind taxpayers that simply travelling from home to work is not enough to qualify for a claim, no matter how far you live from your workplace.
They are also concerned about claims involving;
A false logbook - in a recent case the ATO discovered that the logbook wasn't printed until the following year. The tax payer admitted the logbook was fraudulent and it was ruled invalid. This is a warning not only to individual taxpayers but to businesses using the "logbook method" for business owned cars under the Fringe Benefits Tax Law.
Claiming home to work travel.
Claiming for epxenses paid by an employer or where an employer provides a car.
A tiler claiming for carrying bulky equipment when in fact investigations revealed that he was actually only required to carry a few pencils and a utility knife.
Double Dipping and claiming for a car provided under a novated lease.
It should be noted that home to work travel is NOT tax deductible even where;
you do minor work-related tasks – for example, picking up the mail on the way to work or home
you have to drive between your home and your workplace more than once a day
you are on call – for example, you are on stand-by duty and your employer contacts you at home to come into work
there is no public transport near where you work
you work outside normal business hours – for example, shift work or overtime
your home was a place where you ran your own business and you travelled directly to a place of work where you worked for somebody else
you do some work at home.
The bottom line, don't just claim 5000kms without having justification for doing so. Make sure you have a written record of how you estimated the number of kilometres you have claimed in your tax return. And if you claim to have a logbook, make sure you actually do!