ATO claims being rejected: Sex toys, Gucci bags, dogs
Sneaky Australians are trying to make weird claims when lodging their tax returns but the ATO has warned they will get caught if they do the wrong thing. See the list of wacky items.
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Exclusive: Dogs, paternity tests, sex toys and designer handbags are among the outlandish claims Australians are trying to sneak through at tax time.
Already more than 2.05 million returns have been lodged with the Australian Taxation Office – an increase of seven per cent compared to the same time last year.
More than 727,000 individual 2020 refunds have been issued, totalling more than $1.72 billion with an average refund of $2371.
But assistant commissioner Karen Foat has warned people who are trying sneak through “weird and wonderful” claims that they are watching.
Some of the most ridiculous claims experts say that have been rejected included:
• A truck driver tried to claim a DNA test for himself, possibly relating to paternity issues.
• Pet pooches, which are only considered a tax write-off if it’s a guard dog to protect premises.
• Expensive Gucci handbags.
• Sex toys, which can only be claimed if it’s a tool of the trade for adult industry workers.
• Making a working from home claim for 48 hours a day, seven days a week.
• Someone claiming they did 60 loads of washing of their uniforms every week.
• A childcare worker claiming $9000 in work clothing expenses.
• Using a Nissan Skyline to transport heavy equipment in Outback Queensland on dirt roads totalling $15,000.
Ms Foat said people who are blatantly trying to rort the system would face fines and interest on penalties given.
“We want people to claim what they are entitled to but particularly at the moment some people are really hanging out for their tax refunds,” she said.
“We can’t turn a blind eye to claiming things they clearly are not entitled to and where people are really trying it on they can expect we will be firm with them.”
Katherine Verondais, who runs a popcorn business Crackle Corn, is on JobKeeper payments after losing 90 per cent of her income.
She plans to claim face masks with her tax return.
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“It’s been tough, I will scrape by and I have some savings,” the 37-year-old said.
She said she will be engaging her accountant in the coming weeks to finalise her 2019/20 tax affairs.
Highview Accounting and Financial partner Simon Byers said when making any work-related expenses you “must be able to prove it”.
“You need to have evidence of a receipt clearly stating what it is, it must be work-related and you must have incurred the expense,” he said.
“We refer to the smell test, if it doesn’t smell right then the ATO will determine that.”
He said the ATO has technology that could compare numbers of claims within certain areas of a tax return alongside people in a similar occupation.
“If you are a massive outlier in your workforce they can choose you to be audited,” Mr Byers said.
H & R Block’s director of tax communications Mark Chapman said the “biggest red flag was claiming flat-rate expenses.
“For example claiming 68 cents a kilometre for using a car for up to 5000 kilometres, the ATO is looking at people who are claiming this in occupations that don’t lend themselves to using a car,” he said.
“Also claiming $300 of deductions without receipts, the ATO thinks people are claiming that as an entitlement.”
Originally published as ATO claims being rejected: Sex toys, Gucci bags, dogs