ATO signals crackdown on popular deduction

The ATO has indicated that it will be paying “close attention” to claims for car expenses that are work related for tax time 2017.

While it’s true that you don’t need written evidence for claims of up to 5,000 kilometres per year, you do need to be able to show that you were required to use your car for work, and how you calculated your claim.

There are several points of confusion for what they can and cannot claim as work-related car expenses. For example, if you make a claim for transporting bulky tools, you need to be able to prove you were required by your employer to take these items to work, and that there was no safe place to store them.

Additionally, you cannot claim expenses that have already been paid by your employer, including salary sacrificing arrangements.

As a rule of thumb, there are three important points to remember when you claim car work related expenses

• You have to have spent the money yourself and can’t have been reimbursed
• The claim must be directly related to earning your income
• You need a record to prove it

Please contact us on anna@ewmaccountants.com.au if you have any questions