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  • Feature: Work-related expenses – a case study

    During 2013–14, the ATO responded to community concerns in relation to claims for work-related expenses by employees at a large workplace in Queensland. We conducted sample audits which confirmed numerous incorrect claims, mostly relating to car and travel expenses.

    Working closely with the employer and some local tax professionals, we met with the tax agents of the individuals involved to share our concerns and discuss their views. We conducted interviews to understand the specific working conditions and visited the workplace to collect information, investigate issues that surfaced during sample audits and request data relating to allowances paid.

    To help employees understand their entitlements, we worked with the employer and issued fact sheets to 10,000 employees and encouraged them to review and self-amend their claims where necessary, without penalty. We published detailed information on our website, established a dedicated hotline and email address, and used local media outlets to foster community understanding of the issues and the process.

    As a result of this intervention, around 5,600 individual returns were amended, either voluntarily by the taxpayer or through our compliance treatment. This resulted in a reduction in work-related expense claims of over $70 million and increased liabilities of more than $45 million, across three years of returns (2012–13 to 2014–15).

    To date, there has been one challenge to the ATO position heard at the Administrative Appeals Tribunal. The tribunal found in favour of the ATO, stating that the taxpayer did not have sufficient evidence to support the claims made.

    We continue to monitor the claims of these taxpayers and their tax agents, with follow-up compliance work under way for a small number of clients for the 2015–16 return.

     

    End of Work-related expenses feature
      Last modified: 30 Oct 2017QC 53554