The kids might be noisy over the school holidays, but that does not mean you can rent a separate property to get some peace and quiet to study… and then try and claim it as a tax deduction!! This is an example of the kind of falsified claims and case studies that the ATO has revealed to remind us of the importance of ensuring your tax deduction claims are legitimate, and that if you try to cheat, they will find out.
With over eight million Australians claiming work-related expenses each year, the Australian Tax Office is reminding people to make sure they get their deductions right this tax time. In the words of Assistant Commissioner Graham Whyte (sourced from https://www.ato.gov.au/Media-centre/Media-releases/ATO-exposes-dodgy-deductions, August 2016):
“Australians claim over $21 billion in work-related expenses each year, and we want to support taxpayers to claim what they are entitled to – no more, no less,” Mr Whyte said.
“Most Australians want to do the right thing, but we are seeing mistakes, and while the amounts at an individual level are relatively small, collectively the overall impact is significant. That’s why, it is important for people to get their deductions right.
“From time to time we see people deliberately making incorrect claims. We’ve seen claims for car expenses where log books have been made up and claims for self-education expenses where invoices were supplied for conferences that the taxpayer never attended.
“Deliberately making incorrect claims is an easy way to get into some serious trouble. It’s just not worth it.”
There are some people who really push the envelope to the point of ridiculous.
Check out this case study revealed by the ATO:
A taxpayer claimed self-education expenses for the cost of leasing a residential property, which was not his main residence. The taxpayer claimed he had to incur the expense of renting the property as he ‘required peace and quiet for uninterrupted study which he could not have in his own home’. This was not deductible.
In addition to the rental expenses, the cost of a storage facility was claimed where ‘the taxpayer needed to store his books and study materials’. They claimed they needed this because of the huge amount of books and study material associated with his course and had no space in his private or rented residence where these could be housed. This was not deductible.
The cost of renting the property was around $57,000, with additional expense of $7,500 for the storage facility. The actual cost of the study program he attended that year was only $1200.
Information sourced directly from the Australian Tax Office Website https://www.ato.gov.au/Media-centre/Media-releases/ATO-exposes-dodgy-deductions/?page=1#Case_study_five