Interesting Work Related Expenses Disallowed

work-related-expensesOn 29th January 2016, the Tax Tribunal disallowed the majority of work-related expenses claimed by a Taxpayer, a sales commission agent, in the 2010-11 and 2011-12 income years as not being incurred in gaining or producing his assessable income.

The Taxpayer was found to have indiscriminately made claims, and provided exaggerated and implausible evidence, for various home office occupancy expenses and running costs, overtime meal allowances, costs for staff and client amenities, interest on prior work-related expenses, sunscreen and sunglasses, rubber soled shoes and so called ‘business meals’ for his tax agent.

We couldn’t help but scratch our heads when we reviewed the claims made by this Taxpayer. Check these out:

  • R.M Williams rubber soled shoes – The Taxpayer’s contentions regarding potential damage to computers from static electricity were not supported by any expert evidence.
  • Cost of managing tax affairs – This comprised blanket claims for groceries purchased either on the day of, or on the day before the Taxpayer’s tax agent was claimed to have visited the family home. The cost of feeding your tax agent is not a cost considered to be claimable.
  • Amounts paid to the Taxpayer’s seven year old son for secretarial assistance
  • Large numbers of batteries
  • Stationery including a ‘Dora the Explorer’ pencil case and various stickers and art supplies
  • Outdoor patio setting which the Taxpayer had described as a ‘work table’

When it comes to making work-related expense claims it pays to check with your accountant for what is acceptable and what is likely to attract the attention of the ATO. We’re always here to help you and will make sure you always get what you’re entitled to.