The Australian Taxation Office will clamp down on dodgy tax returns and those earning through platforms such as Uber and Deliveroo.
A recent study showed about seven per cent of Australians have used more than 100 digital platforms such as Airtasker, Uber, Freelancer, Uber Eats and Deliveroo to find full-time or additional work in the last financial year.
Experts believe the ATO will target workers who make dodgy allowance claims like dry cleaning, mobile phones, internet use, and car expenses to claw back an additional $8.7 billion in revenue from workers.
H&R Block director of tax communications Mark Chapman said the ATO has been given additional resources.
‘I think we’ll see far more audits and more letters in relation to incorrect claims around work-related expenses and property, and we’ll see far more data-matching around cryptocurrency and the sharing economy,’ he told News.com.au.
‘They [ATO] do a lot of investigation in this space through technology — they data-match, they have benchmarks, if expenses are outside the norm people will get a letter which is not a full audit, it invites them to think again.”
The ATO claimed it lost $1.5 billion alone on clothes and laundry tax claims during the 2017-18 financial year.
One of Mr Chapman’s tips is for workers to comb back through their bank statements over the last financial year and try to identify items they may be able to claim – such as those they use for work.
‘Take the time to go back over the year and identify all the purchased items you want to claim and make sure you have receipts, invoices, and supporting documents,’ he said.
‘If you have lost any receipts it may be worthwhile going back to the store where you purchased the item and seeing if they can give you another one.
‘Claiming up to $300 on items is fine this year without receipts, however, the ATO is looking at rule as they believe some people are automatically claiming this.’
The ATO believes a number of workers may be taking advantage of the system and not incurring the expenses that they are claiming back.
Last year, the ATO audited more than 1,500 individual taxpayers and fined them $1.5 million for breaches.
Mr Chapman’s biggest tip for avoiding an audit is to make sure you declare all your income.
‘A lot of income is reported by third parties to the ATO, however, the pre-fill info may not be updated so you need to check it is correct, especially if you lodge early.’
He also said submitting your return on time is vital to avoid paying extra and having the tax office looking more closely at your return.
‘You have until the 31st of October to submit your tax return and there is a $210 penalty for every 28 days overdue.’
Small business are also winners this financial year with a number of initiatives setup to assist their bottom line – including being able to claim $30,000 in business assets.