ATO warning on work-related car expense claims

The ATO has announced that it will be closely examining claims for work-related car expenses this tax time as part of a broader focus on work-related expenses.

The ATO is particularly concerned about taxpayers claiming for things they are not entitled to, such as private trips, trips they didn’t make, and car expenses that their employer paid for or reimbursed.

Assistant Commissioner Kath Anderson said more than 3.75 million people made a work-related car expense claim in 2016-17, totalling about $8.8 billion. Each year approximately 870,000 people claimed the maximum amount under the cents-per-kilometre. The ATO is concerned that some taxpayers mistakenly believe that this is a “standard” deduction they are entitled to, without needing to provide any evidence of having travelled that distance, or even having undertaken any travel at all.

The Assistant Commissioner said that the ATO’s ability to identify claims that are unusual has improved due to enhancements in technology and data analytics.

As end of financial year is approaching, if you have any concern or question as to how you should claim motor vehicle expenses, please feel free to contact your RCB Advisors team member.

Source: www.ato.gov.au