ATO and tax experts reveal most ‘outrageous’ | Australian Markets

Yachts, island holidays, gaming consoles and even swimwear for a truck driver seeking to cool off have featured amongst a assortment of wild expense claims Australians have tried to slide previous the tax workplace.

Ahead of the 2025 tax period, Australia’s income assortment company has signalled what will probably be cracking down on this 12 months whereas warning exaggerated deduction makes an attempt “would not be tolerated”.

Among the “most outrageous” work-related deduction makes an attempt the Australian Taxation Office (ATO) obtained final 12 months was a truck driver who tried to assert swimwear as a result of that they had stopped in a sizzling place and needed a swim, and an unnamed fashion industry supervisor who needed to be reimbursed more than $10,000 they spent on luxurious clothes purchased to attend dinners and different features.

A 3rd instance shared by the ATO was of a mechanic who tried to assert gaming consoles, a TV, an air fryer and vacuum cleaners as work-related bills.

All claims have been denied.

“While some people have tried their luck with unusual work-related deduction claims, most people realise to be able to claim an expense it needs to meet strict criteria,” ATO Assistant Commissioner Rob Thomson stated.

“While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible.

“We know in many instances mistakes relating to work-related expenses could be avoided with a little time and effort.”

Island holidays and hair cuts

The “revealing” size some Australians are prepared to stretch the reality if they will rating a tax break was additionally recognized when Chartered Accountants ANZ (CA ANZ) surveyed 180 tax experts.

One taxpayer tried to assert a luxurious yacht as a work expense as a result of “they might have some business to do” on some islands, whereas one other needed to be paid back for month-to-month salon trims as a result of their “hair grows during business hours”.

“There were many dubious claims related to health, wellness and personal aesthetic, including one for the cost of a gym membership as the individual needed to be strong and fit to renovate their rental property,” CA ANZ tax lead Susan Franks stated.

“Another related to a Pilates reformer machine purchased to help an office worker who had a sore back.

“We also noticed a trend of big-ticket luxury purchases passed off as business and work expenses, including one who tried to claim a family trip to a tropical island was related to their earthmoving business.”

Other taxpayers tried to assert vet and food payments for his or her pets, a pool, college charges and an engagement ring.

Franks stated the makes an attempt have been cheeky however discouraged people from making fraudulent claims “because the ATO will not be laughing”.

The tax workplace stated work-related bills, working from home deductions and facet hustles could be within the microscope this 12 months, claiming these are areas that produce “frequent errors”.

More than 10 million people claimed work-related deductions in 2024, and many lodged bills referring to working from home.

“Work-related expenses must have a close connection to your income earning activities and you should be prepared to back it up with records like a receipt or invoice,” Thomson stated.

“If your deductions don’t cross the ‘pub test’, it’s extremely unlikely your declare would meet the ATO’s strict standards.

The advice for taxpayers is to test the ATO web site and to think about using its app the place expense data could be saved and later shared together with your tax agent or uploaded to myTax when lodging your return.