In February, the Australian Taxation Office (ATO) issued a warning to anyone trying to falsely claim personal expenses by passing them off as work-related. 

Tax deductions claimed as “Other” must be accompanied by strict records or individuals may expose themselves to considerable risk and fines.

In this latest crackdown, the spotlight will shine on categories such as:

  • home office expenses
  • bundled mobile phone and internet bills
  • overseas trips
  • car travel
  • work equipment.

The ATO believes 6 million Australians are currently over-claiming with $7.9 billion in “Other” work-related deductions claimed last year.[1]

As a general rule, the ATO stipulates, that if you spend money to earn income, you can usually claim it – either as an immediate deduction or over time. A legitimate expense claim must be able to demonstrate that: 

  • you need to incur the expense to earn the income
  • the expense is not private or domestic in nature
  • the expense is not an outgoing of capital or of a capital nature related to a capital asset.[2]

For example, claiming up to a maximum of 5,000 kilometres per year for work purposes per vehicle is still an acceptable practice. However, keep in mind you must be able to show how you worked out your business kilometres (i.e. by producing diary records of work-related trips).

Individuals are warned that broad claims of items that also share a personal component (as identified above) will come under greater scrutiny.

To claim successfully, an individual must:

  • not have been reimbursed for their purchase in any way
  • hold an invoice or record proving the purchase
  • demonstrate that the purchase is related directly to their earning an income.

Director, Justin O’Brien, says the best way of approaching the threat of increased scrutiny is by applying simple logic, “Generally, as a tax payer, you will have an idea of what’s fair and reasonable, as opposed to attempting to slide things under the radar.”

“If you’re looking to claim an expense and you’re hesitant about its credibility, odds are that item will now come under the spotlight.”

“However, if you are genuinely confused about your entitlements, please contact your West Carr & Harvey accountant for professional advice and guidance to reduce the risk.”

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.


[1] AFR 2018, ‘ATO targets 'other' work expenses this year’ accessed on 27 February 2018,

[2] ATO 2018 ‘Other deductions’ accessed on 27 February 2018,