The Australian Tax Office has released details of the occupations and claims that they will be targeting this year. The ATO has reported that with around 7.1 million individual taxpayers collectively claiming $12.5 billion in deductions for work related expenses in 05/06, work-related expense claims continue to pose a significant challenge. This is an increase of 9.3 per cent over the previous income year, according to GiffardSim Accountants director Rob Giffard.

As a result, the ATO is predominantly focused on work-related expense claims for cars, travel, uniform, laundry and self-education. “The ATO believe these represent high risk claims, as they do account for a hefty slice of total work-related expense claims,” Mr Giffard said.

After scrutiny of patterns in last year’s work-related expense claims relating to specific occupations, the ATO has advised they will be targeting claims made by travel agents or consultants, fitness and sporting industry employees, construction industry employees, security employees and mining site employees.

“For instance, with regard to those in the travel industry, I was advised at a recent National Tax and Accountants Association conference that the ATO will be very interested in looking at claimed deductions for attending industry promotions and deductions for the cost of ‘educational’ or ‘familiarisation’ trips,” Mr Giffard said. Mr Giffard suggested that it would be excellent practice for individuals in such a position to establish evidence that a trip is work related by obtaining a letter from their employer, providing a detailed itinerary and keeping journals for each particular trip.

Another hot spot for the ATO relates to fitness and sporting industry employees. “One thing they may not be aware of is that related expenses, such as gym fees, saunas, vitamins, weight training and so on are considered by the ATO to be private and as such are not tax deductible, however it is worth noting there may be exceptions where employees are required to have an elite level of physical fitness for their job,” Mr Giffard said.

Mr Giffard suggested it is worthwhile for a person in any industry, but particularly those being targeted by the ATO this year, to thoroughly investigate the conditions that apply to work-related claims for their industry and common traps they may encounter. “Just because the ATO is looking closely at these areas, does not mean legitimate claims can’t be made. Seek the advice of professionals, as getting it right can make a significant difference to your return, and conversely error or insufficient records could be costly,” Mr Giffard said.

If you would like to speak to a personal tax return specialist about your tax return and receive professional guidance in legitimately maximising your benefits and claims contact one of the specialists at GiffardSim Accountants in Nowra.