The Australian Taxation Office (ATO) has revealed the dodgiest claims taxpayers have made during the last financial year. The claims include Lego, child support and a wedding reception. ATO assistant commissioner Karen Foat said when people deliberately make dishonest claims, particularly for large sums, it could impose a penalty.
With Australia is still in the thick of the tax return season, the Australian Taxation Office has revealed some of the most creative claims taxpayers have made during the last financial year.
While taxpayers are able make a claim for work related expenses such as travel, clothing and self-education, there is a section on the tax return that allows for other work-related deductions such as overtime meals and home phone expenses. Nearly 700,000 Australian taxpayers claimed almost $2 billion of ‘other’ expenses last financial year, according to the ATO.
However, a review by the taxation office found some taxpayers were claiming a range of private expenses such as private school fees, medical expenses and child support payments – all of which are not allowed to be claimed. ATO assistant commissioner Karen Foat said in a statement that if a deduction isn’t directly related to earning income, the tax office cannot allow it.
“Where people make genuine mistakes, we simply disallow the claim. But when people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty," she said.
“We want people to understand what expenses they can claim and receive every dollar they are entitled to. But making incorrect claims that are personal or private take funding away from providing essential community services, and that’s not ok.”
The five most outrageous claims the tax office has received in the last financial year include children’s Lego kits, vehicles, child support, medical expenses and even a wedding reception.
In terms of child support, the ATO reported that one taxpayer made a claim for "the cost of raising twins" while another bluntly stated, "new born baby expensive".
The taxation office also mentioned that several taxpayers tried to claim for private vehicles they had bought, each in excess of $20,000.
“One particularly charitable taxpayer tried to claim for a car purchased as a gift for their mother," the ATO reported. "While the ATO appreciated the sentiment, unfortunately, we were required to disallow the claim.”
In 2018, the ATO cracked down on tax deduction claims for work-related clothing and laundry expenses, using data analytics to red flag deductions.
“We now scrutinise every return and we have sophisticated analytics to identify unusual claims, including comparing taxpayers to others in similar occupations earning similar income,” ATO Assistant Commissioner Kath Anderson said at the time.
So perhaps it's best to do a little more research before making far-fetched claims on your tax return.