Claiming work related deductions

Car expenses

• When claiming work related motor vehicle deductions remember that you still need to be able to substantiate how you worked out the number of business kilometres you travelled using the cents per kilometre method.
• In order to claim under the log book method – you must have a complete and valid log book.
• Under the log book method, a log book will last for 5 years UNLESS you change the vehicle, your useage pattern changes, your employment changes. If any of these things change you MUST complete a new log book.
• The motor vehicle expense deduction is not available to vehicles over 1 tonne – these expenses get claimed at D2 on the tax return (Travel Expenses).

Travel expenses

• Remember that just because you receive an allowance from an employer does not automatically entitle you to a deduction. Travel allowance claims are only deductive where the tax payer sleeps away from home.
• 1 tonne vehicles are not allowed to claim 100% of expenses – private useage must be taken into account
• Parking expenses are not allowed to be claimed where an employee is traveling to and from work and parking at or near the workplace for more than 4 hours
• Car washing expenses are not allowed where the vehicle is provided for the employee’s exclusive use

Uniform, Clothing & Laundry Expenses

• Everyday clothing is not tax deductible, nor can a claim for laundry be made on these items.   This includes heavy duty conventional clothing such as drill shirts and trousers.
• Only outdoor workers can claim sun protection clothing.
• If your claim for Laundry expenses exceeds $150 you must have written evidence eg diary entries and receipts An estimate of $0.50 per mixed load or $1 for work clothes only loads can be used.
• Conventional footwear including non slip are non deductible

If you are unsure as to the deductibility of your clothing and shoes consider the following tax rulings TR 97/12, TD 1999/62 and TR 98/5 or ask your accountant.

Self education expenses

There must be a nexus between the self education expense and the current income producing activity (Employment) otherwise these expenses can not be claimed.

Other work related expenses

• Sunscreen and sunglasses – outdoor workers can claim these but you must adjust for private useage.
• Home office – running costs can not be claimed on a floor percentage basis, you must use the ATO rate of $0.46 cents per hour only
• Home Office – Occupancy costs – (Rent, mortgage interest, rates) you can not claim theses if the home is not a place of business – (A place of business would include signage and stationery nominating the address as a place of business and the area should not be readily suitable or adaptable for use as a private or domestic purpose such as a bedroom) Having a room set aside for doing admin work at the end of the day does not constitute a place of business.
• Bank fees – you cannot claim these
• All other expenses including computers, mobile phones, internet etc MUST be apportioned between private and business useage.
• Vaccinations are not deductible
• Subscriptions to staff associations or social clubs are not deductible

What are the requirements of your Tax Accountant?

• Reasonable and direct questions need to be asked, we have also provided various checklists for you to use. (Available on our website)
• It is not necessary for you to provide to us or have us view/sight all your receipts, we only need you to advise that you have adequate substantiation. REMEMBER, in the event of an audit you will be required to provide that substantiation to the ATO.
• If we have suspicion that a client is making fraudulent claims we have the right to request to see the substantiating evidence, if the client refuses to provide the substantiation we can refuse to input the deduction and also terminate our services to the client.

What is written evidence?

The following can be used to substantiate your claims:

• A document in English
• Document from the supplier of the goods and services showing the name of the supplier, amount of the expense, nature of the goods and services, date incurred
• Bank statements
• credit card statements
• BPAY reference numbers
• email receipts
• Invoices
• Delivery notes
• PAYG payment summary
• Paper or electronic copies of documents
• Warranty documents