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  • Work-related clothing and laundry expenses television grabs

    The Australian Taxation Office (ATO) has announced that it will be closely examining claims for work-related clothing and laundry expenses this tax time and has released video content for television stations interested in covering the story.

    The recordings feature Assistant Commissioner Kath Anderson speaking about what to be aware of this tax time. The video is available for download (MP4, 22.2MB)This link will download a file for broadcast journalists.


    Assistant Commissioner Kath Anderson discusses work-related clothing and laundry expenses

    What is the ATO focussed on?

    The ATO is focussed on clothing and laundry claims, which are part of a bigger issue with work related expenses

    Clothing and laundry claims are on the rise – up about 20% over the last 5 years. And there’s now about 6.3 million people collectively claiming about $1.8 billion in clothing and laundry expenses.

    What’s happening here is that almost half of all taxpayers are telling us that they have to wear a uniform that is unique and distinct to their employer, or protective clothing, or occupation specific clothing.

    We know lots of people have legitimate claims, but we don’t think that half of all taxpayers would meet the rules.

    What can taxpayers legitimately claim?

    Taxpayers can legitimately claim work related clothing and laundry if they were required to wear either a uniform that’s unique and distinct to their employer, protective or occupation specific clothing.

    Occupation specific clothing is something that clearly identifies you as being in that occupation, like a chef’s checked pants.

    Protective clothing includes things like high-vis vests, steel capped boots or overall or aprons that protect your normal clothes.

    But you can’t claim everyday items you wear that might offer you some protection – like closed in shoes.

    A uniform clearly identifies you as being part of a particular organisation. Now we know the rules are tricky, so if you’re not sure make sure you check out our website.

    What are some of the mistakes that you see?

    The most common mistake we see is people claiming normal clothes that they happen to wear to work, like a suit or black pants.

    Some people think they can claim normal clothes because their boss told them to wear a particular colour, or there is a certain dress code in their workplace. Or in the case of some retailers, employees are actually required to wear items from the latest line.

    Others think they can claim normal clothes because they only ever wear those clothes to work.

    However, all of those people are wrong. You simply can’t claim a tax deduction for normal clothing that you wear to work, even if your boss told you to wear it or you only wear it to work.

    Are there any particular myths around clothing and laundry claims?

    The biggest myth is that anyone can claim $150 even though they aren’t required to wear a uniform that is unique and distinct to their employer, or protective or occupation specific clothing.

    Last year about 1.6m people claimed exactly $150. For many it’s a legitimate expense.

    But we know some people are incorrectly treating it as a standard entitlement, a sort of safe amount that anyone can claim.

    Just to be clear, the $150 limit is there to make record-keeping easier but is not an entitlement for everyone.

    Now some people might say $150 is not much and the ATO shouldn’t worry about it.

    But while it is not much individually, when you multiply that by millions of taxpayers, it adds up to a lot. And besides, no matter how small, it’s not ok to expect other Australians to pay for your dodgy claims.

    How can taxpayers make sure they get it right?

    The best way to get your clothing and laundry claims right is to follow the three golden rules. Only claim if:

    1. You paid for it yourself and you weren’t reimbursed
    2. You were required to wear a uniform that’s unique and distinct to your employer, protective or occupation specific clothing
    3. And you’ve got a record that demonstrates how you calculated your claim

    Now remember: you cannot claim a deduction for normal clothes, even if your boss told you to wear them or you only wear them to work.

    And there’s no such thing as a standard deduction or a safe amount – if it doesn’t meet the three golden rules, then don’t claim it.

    What raises a red flag?

    Look the ATO’s got sophisticated analytics and access to lots of data, and we compare claims of taxpayers.

    And if a red flag goes up, we will investigate the claim, possibly speak to your employer.

    It’s important to remember that regardless of whether you lodge your own return or you use an agent, you’re responsible for making sure that your deductions are right.

    Telling us you thought it was ok because your mate makes those claims or the shop assistant told you its deductible won’t help you in the case of an audit.

    So take the time upfront to get it right.

    Last modified: 14 Jun 2018QC 56002