The ATO hates good advisors!!!!

Brendan Curran | May 14, 2018

So, One of the many items to come out of the recent Federal Budget is $130million EXTRA for the ATO to audit individuals with higher than "normal" work related deductions.

Or, as I like to call it, "$130million to bash up those pesky tradepeople and sales people who INSIST on claiming outrageous things like the "cost of running a vehicle" or so-called "tools" which adds up to several thousand dollars a year."

I mean, seriously: why would a plumber even NEED a new ute, and tools, and petrol, and a phone, and work clothes, and a computer, and safety glasses, and boots????  Its ridiculous to even THINK that someone on wages who gets paid to work, and gets paid an allowance for cover the cost of getting to and from work with 600kg of tools every day would want to claim the cost of doing this in his tax return!!!  Outrageous!!!

I think if every plumber, electrician, builder, landscaper, sales rep and anyone else who uses a car for work should all get their tools and gear and get on public transport just for one day.  Everyone.  I reckon once you fill up all the trains and busses with wheelbarrows and dropsaws then all the OTHER people trying to get to work that day wont fit.

All joks aside, the ATO has set its sights squarely on people who use their car for work.  And have other things like tools, or equipment, or work-related expenses.  Someone in the depths of the ATO machine who has clearly never done anything other than justify an overpaid and underworked junket where you clock on, push some paper around for 7 hours 21 minutes a day, and rack off home for some pinot and kale salad had decided that it is "unreasonable" to claim deductions without the proper substantiation.

And what YOU think might be good enough might not fly if the ATO decides to have a look at your claims.

So the moral of this story is that the ATO has an unwritten mandate to increase taxation revenue.  They wont admit it, but thats what is going on.  They had a crack at big business who are shipping profits offshore by the billions.  And failed because big business can afford big time Tax Law Barristers who can out-tax the tax office.  Then they had a crack at high profile individuals such as Paul Hogan.  And they found out that Paul Hogan uses the same Tax Law Barrister.

SO that leaves the rest of us to fund the $130million extra funding for these tax audits, and generate some additional tax revenue for the government to pay public servants to play minesweeper.

It is not great news for you if you use a tax agent to help you with your tax either.  Because tax agents tend to GIVE ADVICE ABOUT TAX.  and smart taxpayers listen to that advice.....such as "if you keep a log book and all your receipts you will probably end up with a better tax refund than is you just claim using the cents per km method"   Or, "keep a record of how many work calls you make on your mobile phone and you can claim some of the cost of keeping a phone"  or "those expenses that you DONT get reimbursed for when on work trips can be tax-deductible"  SO, I have a sneaking suspicion that the ATO will target taxpayers who A) use a tax agent and B) claim higher than normal amounts for work related expenses.

So the ATO hates those pesky advisors who tell their clients to claim tax deductions just because they are allowed.  and they hate those upstart taxpayers who insist on claiming deductions based on the advice they receive from their tax agents.  Thats a bit sad, but it seems to be a fact.

so what does one do with this information????  One option is to claim LESS, get a smaller refund and keep the ATO happy.  DO the tax return your self, on Etax, and get no advice, dont find out if you CAN or CANT claim something.  Just assume you cant and pay a bucketload more tax than you should.  Its what the ATO wants and it will help them fund their audit budget and pay for another fact-finding seminar in Port Douglas!!!!

But a better solution is to outfox the ATO.  Check that your log book IS compliant!!  Make sure you KEEP your receipts!!!! 

Keep a diary of your usage of your phone. 

Keep a diary of how much work you do from home. 

make sure you have EVIDENCE that you ACTUALLY spent the money, and

get confirmation from your tax agent that what you doing IS ALLOWED.

Even get a letter from your employer explaining that you get paid a car allowance because you are required to use your own vehicle for work.

The ATO has declared war on work-related deductions.  You can choose to roll over and cop it in the neck, or get busy protecting the right you have as a taxpayer to PAY THE MINIMUM AMOUNT OF TAX.  Because as Kerry Packer said, those idiots are not doing such a great job with the tax revenue they already get that they deserve to get any more!!!