Scott Morrison’s July tax offset was pretty sweet — but not if an audit leaves you out of pocket. Picture: Supplied.
Scott Morrison’s July tax offset was pretty sweet — but not if an audit leaves you out of pocket. Picture: Supplied.

ATO issues warning on dodgy tax claims

IN THE wake of Scott Morrison's July tax cuts, a record number of Aussies quickly rushed to file their tax return, hoping to cash in.

Now, tasked with the challenge of processing every single expense, the Australian Taxation Office has issued a grim warning to those who may have filed dodgy returns.

According to assistant tax commissioner Karen Foat, tax evasion costs the economy a whopping $8.7 billion annually.

"We know that some people think it's OK to overclaim their deductions even by just a little. But our message is - that's not OK," she told the ABC.

"Some people fess up straight away but some people continue the lie. But it's just better to be honest with us even if you've done the wrong thing; it will be a much less painful experience."

This year, the ATO is promising to use the most sophisticated tech in crossmatching analytics to catch people out.

"We see behaviours ranging from genuine mistakes through to deliberate over-claiming," Ms Foat explained.

"In the most extreme cases of intentional fraud, we may seek to prosecute through the courts."

If you've been caught out lying to the ATO, you can expect to be swatted with a fine and potentially even a conviction depending on the severity of the misleading claim.

From comparing your claims to others in similar roles, to "hoovering" up data from third-parties, the ATO actually has a lot more information on you than you would expect, tax communications director Mark Chapman told Business Insider.

"It collects information from a bunch of outside sources, like banks, real estate agents, employers, and from the sharing economy with things like Uber, and compares it to what you claim each year."

 

Lots of people over-claiming a little has a huge impact, says the ATO. Picture: istock
Lots of people over-claiming a little has a huge impact, says the ATO. Picture: istock

 

Areas that often trip up taxpayers include car travel claims, laundry and uniform deductions. In case the ATO would like to review, Ms Foat suggests being honest from the beginning and always keeping receipts. Penalties may apply for deliberate false claims.

The ATO's warnings have been met with the criticism that small taxpayers face additional pressure while multinational corporations are never held accountable for their tax liabilities. But Ms Foat insists large companies are "paying more tax than they ever have" while the ATO simply tries to ensure everyone pays their fair share.

"A small amount of over-claiming by a large number of people adds up," Ms Foat said.

"We can't turn a blind eye to that."