Work-Related Deductions in ATO’s Sights

Now that the financial year is over, it’s time to focus on your return – and how you can avoid any headaches from the ATO.

In the past, the ATO would highlight specific occupational areas and find discrepancies in the returns in those focus groups. In the rapidly evolving digital age – with data quickly and easily accessible – even the ATO is using these techniques to spot irregularities.


As noted in a recent article from the Geelong Advertiser, the ATO now has the ability to look at all occupational areas in real-time monitoring. This allows the ATO to spot anomalies in deductions compared to an average of comparable returns. For instance, if your return as a sales rep has higher than normal deductions compared to other sales reps, than the ATO will flag it and send you a letter.


The letter highlights the analytics – showing the comparisons and what the average deduction for sales reps (in this example) making a comparable salary to you. HOWEVER, this letter is not a notice that you have done anything wrong. It’s merely to highlight a potential discrepancy. As the above article states, when these letters were sent out last year, many changed their claims – but not all of them did.


If you have all of your receipts, and made proper claims and deductions, then there is no reason to worry or change anything in your return. The question is “Did I make a proper deduction?”.


Tax Deduction DON’TS

  • Travel between work and home
  • Car expenses, when the car is salary sacrificed
  • Everyday work clothes (not uniforms) – if you would wear it out and about, then you can’t deduct it
  • Cleaning eligible work clothes – this needs to be calculated using a reasonable formula
  • Self-education expenses NOT related to your current employment
  • Private phone and internet use


This is where the accountants at The Pen can help. We work with you to ensure that you can take the maximum allowable deductions, taking care that all of your return is in proper order. Talk to one of our accountants today.

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