Dodgy car claims

ATO “puts the brakes” on dodgy car claims

The ATO is making work-related car expenses a key focus again during Tax Time 2019.

Assistant Commissioner Karen Foat said over 3.6 million people made a work-related car expense claim in 2017/18, totalling more than $7.2 billion.

“We are still concerned that some taxpayers aren’t getting the message that over-claiming will be detected and if it is deliberate, penalties will apply,” she said.

“While some people do make legitimate mistakes, we are concerned that many people are deliberately making dodgy claims in order to get a bigger refund. We see taxpayers claiming for things like private trips, trips they didn’t make, and car expenses their employer paid for or reimbursed them for.”

One in five car claims are exactly at the maximum limit that doesn’t require receipts.

Under the cents per kilometre method, taxpayers don’t need to keep receipts, but they do need to be able to demonstrate how they worked out the number of kilometres they travelled for work purposes.

The ATO’s sophisticated analytics compares taxpayer claims with others earning similar amounts in similar jobs.

Where the ATO identifies questionable claims, they will contact taxpayers and ask them to show how they have calculated their claim and, in some cases, the ATO may even contact employers to confirm whether a taxpayer was required to use their own car for work-related travel.

Case studies

The ATO’s sophisticated data analytics found a range of unsupported claims in 2018, including:

  • When the ATO asked a taxpayer to provide the logbook to support a claim of $4,800, they found the taxpayer was referring to a car service logbook rather than a logbook kept for calculating their work use car percentage (the taxpayer had not undertaken any work-related car travel during the year).
  • Another claim was flagged by the ATO’s analytics indicating a taxpayer, a retail worker, had incorrectly claimed $350 for the cost of public transport to and from work.
  • The ATO also identified an office worker claiming $3,300 for 5000 kilometres of work-related travel using the cents per kilometre method, but it turned out the taxpayer’s claim was based on trips he made from home to work.
If you are serious about business growth and opportunities, we want to work with you. WA entrepreneurs, startups and established business owners – as long as you have the vision, Omnis Group has the know-how to get you there. Call us in Perth today on 08 9380 3555.

Justin Flavel

Managing Director

Justin’s experience spans across 20 years in accounting, financial analysis and general business practice.

Although born and bred on the land, Justin’s interest was more in spreadsheets, ledgers, and finance which led him to attend university. In 1992, Justin graduated with a Bachelor of Business majoring in Accounting and Finance. As well as qualifying as a CPA member and becoming a Fellow of the Taxation Institute of Australia, he began gaining practical experience in small and mid-tier accounting practices.

During the late 90s, Justin decided to expand his horizons and travel through Europe. It was during this time that he seized the opportunity to expand his knowledge on the workings of large organisations by taking on roles in multinational corporations.

Today, Justin’s passion is in facilitating businesses to grow and evolve. His focus is on acting in the role of business mentor to help clients develop the full potential of their businesses. He joins clients on their unique journey, and provides the tools and knowledge they need along the way to make the right decisions.

Justin’s aim for his clients parallels his own philosophy and personal journey—focusing on his own career growth and business success while maintaining balance in his life with his wife and three daughters.

Omnis Group Managing Director - Justin Flavel