Chartered accountant GAIL FREEMAN shares some of the funnier – and failed – claims some people have attempted to make in their tax returns…

As it’s the time when a lot of people are doing their tax returns. I thought you might be interested in some of the more unusual claims that people have attempted to make and the ATO’s response. 

I will start by stating that the income tax assessment acts require that personal items are not deductible and most of these unusual claims are for personal items.

Let’s look at some dog claims first, one taxpayer tried to claim a Maltese terrier as a guard dog. While some Maltese terriers are feisty, I know because I owned a feisty Maltese, the ATO disallowed this claim.

There are several amusing cases where taxpayers have attempted to claim dogs as guard dogs. However, a Maltese or a Chihuahua obviously doesn’t cut it. 

I even had one client try to claim their pet as a guard dog when they lived in premises above the shop, as they felt that the dog’s barking would indicate that there was an intruder in the shop.

There are cases where people tried to claim food, rent and general living expenses as they had a need to “eat and sleep to stay alive to go to work”.

That does not make these expenses tax-deductible and does not remove them from the personal items, which I alluded to above.

Another taxpayer tried to deduct wedding expenses as they were in relation to an overseas work trip. Funnily enough, that was also disallowed!

There have been many claims for relieving stress caused by work. These include gambling losses, alcohol and cigarettes, which were of course disallowed.

Then there are cases of people who have tried to claim a private holiday as work research. Needless to say, they have been unsuccessful if the primary purpose of the trip is a holiday; it is a holiday.

However, if there are two purposes to the trip, work research and a holiday then the work research costs can be apportioned. The ATO looks at these trips very carefully.

If you want to make a tax deductible donation, you need to donate to a deductible gift recipient (DGR). Making a donation of a present to a relation is not considered making a donation to a DGR and is therefore not tax-deductible.

We often get asked if guys can claim their suits or women’s clothes because their employer requires them to look a certain way.

There have been many cases where people have taken their claims to the tribunal and they have been knocked back because clothes are considered personal unless they constitute a uniform. Uniforms characteristically have logos, so this could be sufficient to determine whether the clothes are a uniform or not.

Apparently, one taxpayer attempted to claim a mankini, a la Borat, to give to a colleague for the express purpose of improving morale in the workplace. The claim was denied, I cannot comment on the morale in the workplace.

Every year, every accountant sees unusual claims. So before you make a claim that is likely to be knocked back and result in penalties if the ATO disallows it, contact the expert team at Gail Freeman & Co Pty Ltd on 02 6295 2844 for guidance. It will save you in the long run. Email [email protected] or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.

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