Australia Taxation Office to crack down on dodgy claims

The Australian Tax Office has warned it will be cracking down on dodgy claims for laundry expenses.

It will be focusing on what people mistake as a ‘standard deduction’ or minimum amount that can be claimed without receipts.

‘Last year around 6 million people claimed work-related clothing and laundry expenses, with total claims adding up to nearly $1.8 billion,’ Assistant Commissioner Kath Anderson said in a statement on Wednesday.

The ATO will be focusing on what people mistake as a ‘standard deduction’ or minimum amount that can be claimed without receipts. 

‘While many of these claims will be legitimate, we don’t think that half of all taxpayers would have been required to wear uniforms, protective clothing, or occupation-specific clothing.’

For washing, drying and ironing expenses there is an easy formula to calculate how much you can claim if the amount is under $150.

As a rule you can claim $1 per load if it is made up of only work-related clothing, and 50 cents per load if it includes other items not related to work.

‘We know that some people think $150 is not a large amount and that nobody will notice if they over-claim,’ Ms Anderson said.

‘But while $150 might not be big individually, when you multiply it over millions of taxpayers, it adds up to a lot. And besides, no matter how small, other Australians shouldn’t be expected to wear your over-claiming.’

Ms Anderson said there are three golden rules to follow which will help taxpayers to get their deductions right.

The Australian Tax Office has warned it will be cracking down on dodgy claims for laundry expenses 

The Australian Tax Office has warned it will be cracking down on dodgy claims for laundry expenses 

‘One – you have to have spent the money yourself and can’t have been reimbursed, two – the claim must be directly related to earning your income, and three – you need a record to prove it.’

In one case last year an advertising manager was fined after she claimed $1854 for laundry expenses and clothing purchased from a fashion retail store.

‘When we contacted her, she said she represented her company at work functions and awards nights and was required to dress a certain way,’ the ATO said in a statement.

‘We explained that expenses for conventional clothing are not deductible, even if you are required to wear them for work, and/or only wear them for work. The taxpayer’s clothing and laundry claim was disallowed in full, and a penalty for failing to take reasonable care was applied.’

How to calculate your laundry claim

Claiming $150 or less for clothing and laundry (and less than $300 for work-related expenses in total)?

Make sure your claim is for eligible clothing (occupation-specific, protective or uniform). Remember, you can’t claim for plain or conventional clothing, even if your employer requires you to wear it and even if you only wear it to work.

Calculate your claim for washing, drying and ironing at: 

$1 per load if the load is made up only of work-related clothing 

50c per load if you include other laundry item

You may be asked to demonstrate how often you wore your eligible clothing (eg. evidence that you worked three shifts a week for 48 weeks in a year)

 Source: ATO

 



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