Topics on work-related expense claims (4)

Car Expense Dispute and Other Work-Related Deductions

The Australian Taxation Office (ATO) disputed the validity of a taxpayer's logbook, resulting in reduced deductions for work-related car expenses for the 2012 to 2014 income years. The ATO limited the deductions to a maximum of 5,000 kilometers using the cents-per-kilometer method. Additionally, the taxpayer voluntarily reduced the claim for car expenses to zero for the 2016 income year.

The ATO's action was based on several grounds:

• The logbook lacked consistency, suggesting entries were not made promptly after journeys.
• Entries contradicted other documents provided to the ATO by the taxpayer.
• Descriptions of journeys were inadequate to classify them as business-related.

The taxpayer admitted to making mistakes in constructing the logbook during cross-examination. Despite initially declaring the logbook entries as "true and correct," the taxpayer acknowledged errors, including using cut-and-paste methods from various Excel spreadsheets.

Other Work-Related Expenses

In addition to car expenses, the taxpayer claimed various other work-related deductions, including:

• Home office occupancy costs (a portion of rent).
• Home office running costs (a portion of electricity & gas).
• Telephone and internet costs (claimed 80% as work-related).
• Stationery, printer cartridges, and related consumables.
• Newspapers, journals, magazines, and online news subscriptions.

In the 2012 income year, additional depreciation claims were made, presumably for home office furniture and equipment.

Challenges Faced by the Taxpayer

The taxpayer faced challenges in providing evidence to support the work-related expenses claimed:

• Unable to obtain a letter from the employer confirming work from a home office.
• Lack of diaries as they were kept in a company-provided MS Office.
• Absence of reimbursement for residence-related expenses.
• Relocation resulting in the loss of receipts for stationery, cartridges, newspapers, journals, and other consumables.

For further assistance or inquiries regarding tax matters, contact Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment through the live calendar.

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