The Australian Taxation Office (ATO) is alerting taxpayers that its sights are set on work-related expenses like car and travel claims that are predicted to decrease in this year’s tax returns.

Overall, around 8.5 million Australians claimed nearly $19.4 billion in work-related expenses in their 2020 tax returns.

Assistant Commissioner Tim Loh noted that COVID-19 has changed up people’s work habits, so we expect their work-related expenses will reflect this.

“We know many people started working from home during COVID-19, so a jump in these claims is expected,” Mr Loh said.

“But, if you are working at home, we would not expect to see claims for travelling between worksites, laundering uniforms or business trips.”

Last year, the value of car and travel expenses decreased by nearly 5.5%. However, there was a slight increase of around 2.6% in clothing expenses. With uniform and laundry claims significantly lower, this increase was driven by frontline workers’ first-time need for things like hand sanitiser and face masks.

“While it’s good to see most people have been doing the right thing, our data analytics will be on the lookout for unusually high claims this tax time. Particularly where someone’s deductions are much higher than others with a similar job and income.”

“We will also look closely at anyone with significant working from home expenses, that maintains or increases their claims for things like car, travel or clothing expenses.”

“You can’t simply copy and paste previous year’s claims without evidence.”

“But we know some of these unusual claims may be legitimate. So, if you explain your claim with evidence, you have nothing to fear.”

“We also want to reassure the community that we will be sympathetic to legitimate mistakes where good faith efforts have been made. However, where we spot people deliberately claiming things they’re not entitled to, we will take firm action,” Mr Loh said.

During 2020, the ATO had to shift focus on getting stimulus benefits out the door as quickly as possible to support so many businesses in need.

In 2021, we will be continuing to balance our role in supporting taxpayers through this very challenging time, while recommencing our focus on addressing overclaiming of work-related expenses.

If you have any questions, feel free to ask them in the comment section. We will be happy to answer all your queries.