How the ATO is going after dodgy claims
MOTORISTS making dodgy work-related car expenses such as mileage claims are the latest target of tax officials.
Mileage claims have come under the microscope by the Australian Taxation Office at tax time and drivers are being warned to be careful when lodging their expenses.
The ATO's assistant commissioner, Karen Foat, said millions of motorists made car-related expenses every year but there remained concerns some were still over-claiming.
"We are still concerned that some taxpayers aren't getting the message that over-claiming will be detected and if it is deliberate penalties will apply," she said.
"While some people do make legitimate mistakes we are concerned that many people are deliberately making dodgy claims in order to get a bigger refund."
ATO figures show in the 2017-18 financial year more than 3.6 million people made work-related car expenses totalling $7.2 billion.
There are two ways taxpayers can make car expense claims:
• Charging cents per kilometre at a set rate of 68 cents per kilometre. Receipts are not needed for claims up to 5000 kilometres.
• Using a logbook based on the percentage of work you use your car for and your actual expenses. A logbook must be kept for a minimum continuous period of 12 weeks. You can use receipts to claim fuel costs or estimate expenses based on odometer readings.
Deakin University tax expert Associate Professor Adrian Raftery said car-related expenses "are one of the biggest deductions people do claim".
"People legitimately use their car for work purposes and I would still encourage them to claim what they are legally entitled to," he said.
"I'm a strong advocate for people to use the logbook method for 12 weeks and then they can actually record how much they use their car for work purposes."
The ATO said it could carefully scrutinise claims by comparing them to other claims made by taxpayers in similar occupations.
Ms Foat warned "simply driving between work and home is not enough to warrant a deduction".
"You must have a work-related need to travel while performing your job like travelling from site to site or be required to transport bulky tools," she said.
• Usually trips between home and work cannot be claimed unless you are moving bulky equipment.
• Do not double dip by claiming car expenses reimbursed by your employer.
• Keep your records to prove how you made your claim.