The ATO has released a guide called Don’t be a dummy with your deductions which is intended to serve as a warning to taxpayers as people start thinking about preparing their 2017 tax returns.

The guide sets out the following 11 items that are often claimed, but in some cases (or even most cases) shouldn’t be:

  • Travel between home and work
  • Car expenses for transporting bulky tools and equipment
  • Salary packaged car expenses
  • Meal expenses while travelling
  • Travel that includes a private component
  • Clothing
  • Cleaning costs for work clothes
  • Self-education costs
  • Phone and interest expenses
  • Tools and equipment

If you are unsure whether you are eligible to claim the above items, please give us a call to discuss.

What is on the ATO hit list?

The ATO has updated its guide which sets out the types of behaviour and the tax issues that are likely to attract its attention.  The guide is specifically aimed at privately owned groups and sets out a range of specific areas that are likely to attract unwanted attention from the ATO.

The following list includes behaviours, characteristics and tax issues that may attract the attention of the ATO:

  • Tax or economic performance not comparable to similar businesses
  • Low transparency of your tax affairs
  • Large, one-off or unusual transactions, including transfer or shifting of wealth
  • A history of aggressive tax planning
  • Tax outcomes inconsistent with the intent of tax law
  • Choosing not to comply or regularly taking controversial interpretations of the law
  • Lifestyle not supported by after-tax income
  • Accessing business assets for tax-free private use
  • Poor governance and risk-management systems

If you have any concerns, please give us a call on 3286 1322.