Today’s the last day of the financial year and Australians have been getting their tax returns in order to make a more organised start to FY15 and hopefully get a little extra money in their pocket from their tax refund.
Australians claim almost $20 billion in work-related expenses each year. Some people can claim surprising occupation-specific deductions, such as adult industry workers who are eligible to claim condoms, lubricants, gels and “dance lessons… you take to maintain your existing dance skills or to learn new dance skills.” Journalists can claim pay TV and social functions, while real estate agents can receive deductions on gifts brought for work purposes such as “a Christmas hamper, a bottle of whiskey (or) a pen set.”
Most of what people are entitled to claim is a matter of common sense, but that doesn’t stop people trying to claim some ridiculous items as work-related expenses. We spoke to the ATO and some accountants about some of the most brazen claims they’ve seen. Here are some of the best.
A Jumper, Because It Was Cold
Another client “bought a jumper on work trip in Canberra because it was cold”, and insisted it should a work-related expense.
An Ironing Board and Underwear
One accountant from Sydney Accounting said a client tried to claim his “ironing board and underwear because he needed it for work.”
A Cat Sitter While At Work
This same accountant even had a client who assumed they could claim paying a “cat sitter” as a legitimate work-related deduction because by “coming to work he had to leave his cat home alone”.
A Trip To A Court Hearing
Principal of Northern Beaches Accounting, Paul Bailey, recalled a time when he was at a firm in Singleton, near an army base. He said one day a soldier came to his firm “asking if he could claim a trip to Bathurst. When I asked him why he said he had to go to court.”
“I found out he had tried to belt somebody… he was trying to claim it as a travel expense.” Bailey told him it wasn’t something he could claim.
Dogs And Dog Food
Bailey said “tradies often try to claim the animals they take with them to work… as security dogs”.
“They claim (a portion) of vet bills or pet food.” It might sound far-fetched but it is actually something people can claim in the right circumstances. Bailey said he doesn’t deter people from doing so in some cases, as the animals can prevent theft from work vehicles.
Pets as Home Security
Staying on the pet theme, one retired accountant reflected on a client who wanted to claim his little pet dog as “security for his home office”. The accountant was even more confused when he learned the client didn’t even work from home.
Hand Cream to Keep Tradies’ Hands Soft
According to the tax office, “A building construction labourer claimed for the cost of hand cream as a work-related expense.” However the hand cream was “deemed to be a private expense and disallowed.”
Moving House for Personal Reasons
The tax office also recalled “A project manager who moved interstate, claimed for relocation expenses as a ‘travel expense’. His decision to move interstate for work was a personal decision and therefore not deductible as a work-related expense.”
MGI accounting firm in Cairns had a client come in and say: “Toilet paper is definitely needed for work. It’s not provided by my employee.” Maybe that is a sign that it is time to make a career change.
A Home Theatre
Another MGI client tried to “claim a complete fitout of a home theatre because he was a company employee”. There were to problems: “One, this client’s business had nothing to do with production or arts and two, he wasn’t even employed at the business at that particular time.” All he was trying to achieve, the former accountant said, “was to avoid paying the GST on the items he bought.” Unlike God, the ATO doesn’t love a trier.
Richard Grayburn, an accountant at Bentleys NSW, said: “I’ve had someone try to claim their groceries as a home office supply”.
All that tracking of expenses makes you hungry.
The ATO has details on correct entitlements.
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