The Australian Taxation Office is always sifting through a mountain of receipts, dodgy deductions and, apparently, some truly creative thinking. This year, the ATO has served up a fresh batch of the wildest, most eyebrow-raising tax claims it’s seen.
Spoiler: If you thought your air fryer was a work expense, you’re not alone — but you’re definitely not getting that deduction.
According to the ATO, one truck driver thought they could claim swimwear as a work expense because, and I quote, “it was hot where they stopped in transit, and they wanted to go for a swim”. The ATO was not convinced.
As Assistant Commissioner Rob Thomson put it, “While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible,” per the Sydney Morning Herald.
So unless you’re hauling freight across the Great Barrier Reef, leave the Speedos off your tax return.
Another hopeful — a mechanic — decided their work expenses included an air fryer, a microwave, two vacuum cleaners, a television, a gaming console and gaming accessories. The ATO said these were “personal in nature”. In other words: nice try, but your boss paying you to play Mario Kart on your break only happens in your dreams.
And in the world of fashion, a manager tried to claim more than $10,000 in luxury clothing and accessories, arguing it was all about being “well-presented at work, and to attend events, dinners and functions”.
The ATO wasn’t having it, saying, “The clothing was all conventional in nature and was not allowed.” So, unless your work uniform is a Versace tracksuit, you’re out of luck.
Thomson summed up the ATO’s vibe perfectly: “If your deductions don’t pass the ‘pub test’, it’s highly unlikely your claim would meet the ATO’s strict criteria.” That’s about as Aussie as tax advice gets. If you’d get roasted for telling your mates about your claim at the pub, maybe don’t bother sending it to the ATO.
“Where something doesn’t look right, the ATO will get in contact with you to be able to show that you’ve got records to substantiate your claim, and also explain why that claim relates to your work income,” Thomson said. And yes, penalties can apply if you’re being a bit too creative.
“Last year, we had someone that worked in a laundromat that tried to claim about $30,000 on their overseas safari trip as a work-related expense,” he said.
“Obviously, that one was a personal expense.” Everybody is so creative.
Why does the ATO actually care?
If you’re wondering why the ATO is so strict, it’s not just for fun. In 2021–22, dodgy work-related expenses were the single biggest contributor to the so-called “tax gap” — that’s the difference between what the ATO expects to collect and what they actually do. In 2021-22, that gap was $948 million.
Look, mistakes happen. Thomson admits most could be avoided with “a little time and effort”.
His advice? “Work-related expenses must have a close connection to your income-earning activities, and you should be prepared to back it up, with records like a receipt or invoice.”
And just in case you’re still wondering: travel to and from work and childcare costs are not claimable.
So, if you’re thinking about claiming your next beach holiday or your new PlayStation as a work expense, maybe give it a miss. Or at least check the ATO website or chat to a registered tax agent before you end up as next year’s cautionary tale.
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