The Australian Taxation Office will be using data matching systems to explore any perceived ‘irregularities’ that may trigger an audit or review of plumber’s 2012 tax returns.
The audit may include writing letters to taxpayers whose claims are at the upper level of average for their occupation; targeting taxpayers whose claims have increased significantly in the past few years and it may require the taxpayer to complete work related expense information sheets on lodging their tax return.
H&R Block, Regional Director Frank Brass says the critical response is not to panic. He believes the best approach is not to become over-cautious in making claims, but to get your paperwork in order and make a full and genuine claim for all your entitlements.
“Taxpayers have a right to claim their tax deductions and the ATO scrutiny does not change this. You should claim all you are legally entitled to and the best way is to make sure that you have all the necessary records to substantiate your claims, and then claim accordingly. If the Tax Office does review your tax return you know you have no problem,” said Frank Brass.
The main focus of the Tax Office scrutiny will be deductions relating to key areas such as motor vehicle and travel expenses, and equipment and tool purchases. They will be looking for sufficient documentation to support claims; incorrectly claiming travel/ motor vehicle expenses (particularly if the travel is commuting), and incorrect claims for mobile phone and internet costs claims.
If you are unsure you should seek help from tax professionals who can help you at every stage of your return.