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ATO targeting false laundry claims

The ATO will target false clothing and laundry work-related expense claims this Tax Time.

In 2018, around six million people claimed work-related clothing and laundry expenses totalling nearly $1.5 billion.

Assistant Commissioner Karen Foat said although many Australians can claim clothing and laundry expenses, it’s unlikely that half of all taxpayers are required to wear uniforms, protective clothing or occupation-specific clothing to earn their income.

“Last year a quarter of all clothing and
laundry claims were exactly at the recordkeeping
limit”, Ms Foat said.

“But don’t think that we won’t scrutinise a
claim because we don’t require receipts”.

The ATO is also concerned about the number of people claiming deductions for conventional clothing, such as retail workers claiming normal clothes “because their boss told them to wear a certain colour, or items from the latest fashion clothing line”, or others claiming normal clothes because they only wear them to work.

The ATO’s sophisticated data analytics is constantly improving and can identify unusual claims by comparing taxpayer claims to others in similar occupations.

Taxpayers who can’t substantiate their claims should expect to have them refused, and may be penalised for failing to take reasonable care when submitting their tax return.

Conventional clothing such as black trousers and a white shirt, or a suit, are not sufficiently distinctive or unique to an employer, and clothing in a specific colour or brand is not enough to classify clothing as a uniform.

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