Australia's dodgiest tax deduction claims
BOOB jobs may not be tax deductible, but G-strings are.
Australians make $22 billion worth of work-related tax deductions every year with an average claim of $2500, and ATO Commissioner Chris Jordan has warned that a "startlingly" large number of people are effectively gaming the system.
As the deadline to file your 2017 tax return nears, accounting firm The Income Tax Professionals has revealed the 10 most ridiculous claims its accountants have come across.
"I once had a client who was doing a uni course in chemistry," said Simon from Wagga Wagga. "They were doing an assignment and needed to test water samples so wanted to claim a boat for that."
Graham from Erina said he once came across a "multiple wives" arrangement. "I'll never forget that time I was asked if three different men could claim the same women for the spouse rebate. How romantic," he said.
Make-up for a vain boss is also out of the question, according to Ken from Bayswater. "I was once asked by a young office worker, 'Can I claim my make-up because my employer wants me to look good?'" he said.
James from Geraldton recalled how "a client who worked in customer relations asked me to put her plastic surgery down as a tax deduction". "It was a boob job," he said.
Unfortunately, dogs are also usually a no-no for the ATO. "We once had a couple who worked from home try to claim guard dog expenses for their pet chihuahua," said Avril from Orange.
Wendy from Geraldton said her client tried to claim their dog because they were a property manager and "took it with them to do rent inspections and said the dog was security".
Danielle from Baulkham Hills said one client had an unusual take on the uniform allowance. "I really wasn't sure what to think when a client was trying to explain why he put his wife's lingerie as 'protective clothing' for their business," she said.
Wendy from Liverpool said one client couldn't even remember his wife's name. "He came back to the office at least four times and changed his wife's and kids' details," she said.
Mark from ITP's head office said he once had a client as if they could "claim a donation to Vinnies for the purchase of their clothes every year". "Unfortunately not," he said.
The best claim, however, came from ITP accountant Scott. "A primary school teacher once came to me to claim their custom made G-strings for their second job on the side as a stripper," he said.
"The G-strings needed to be stronger as women would tend to try and rip his clothes off him. Would you believe we could actually claim this as a legitimate cost for him as it classified as work clothing for his profession."
ITP regional director Scott Bailey said the ATO's rules were always changing, and it was impossible for workers to be across each and every deduction in their field.
"For example, many small businesses are excited about the current $20,000 write-off that is available for business assets," he said in a statement. "But as a general rule, you should not go out and buy something purely for a tax deduction. It should be based on what you need.
"A tax deduction only gives you back a percentage of your expense back based on your marginal tax rate, not the entire expense. Many advertising campaigns send confusing messages and try to get you to buy their stock by saying, incorrectly, that you will get all your money back. That's just not true."
Tax experts have been warning that the ATO's increasingly sophisticated systems have made it harder than ever to make dodgy claims on your tax return. Up until a few years ago, the ATO would target particular occupations each year for closer scrutiny.
"One year it would be teachers, then doctors, nurses, they were doing it on an occupation basis," Andrew Gardiner, spokesman for the National Tax and Accountants Association, said earlier this month.
"But their audit case selection has become far more sophisticated. They're now looking at average claims. Where the claim is abnormal relative to the industry average, they will then seek information as to why the claim is anomalous."
In 2015, 8.6 million Australians claimed work-related expense deductions worth $22 billion, reducing the overall tax take by between $7 billion and $10 billion.
Speculation has been growing that the government will move to scrap work-related deductions altogether in favour of a flat $2000 deduction in a bid to cut costs and reduce the complexity of the system.