According to an article released by in May of 2018, the ATO is intent on cracking down on work-related car expense claims.

In the previous tax year of 16/17, more than $8.8 billion was claimed by 3.75 million Australians. It’s a number that is rising and one which the ATO is going to be looking more closely at this year. The scope of the issue is considered to be large enough to warrant additional government scrutiny amidst concerns that people are taking liberties with their allowances.

Under the current ATO guidelines, anyone who uses their car for under 5000KM per year do not need to keep a logbook for their mileage. As such, people have started to include this, almost as if it was a standard deduction.

In a statement made by the assistant commissioner, Kath Anderson; the ATO is further going to be looking into whether employees are being reimbursed by their employers and whether the miles are legitimately being clocked-up for work-related reasons only.

Thanks to advances in the technology the ATO is now using, they can quickly compare data across millions of tax claims for individuals who work in similar roles and who earn a similar income.

In one example of a recent prosecution that was made public by the ATO, an employee claimed $380 in tax deductions for a car that was held under a novated lease; meaning the employer was already covering the cost, not the employee.

The advice from the ATO is clear, they will be looking into more work-related car expenses claims than ever before, and they will be requesting evidence to support such claims. With this in mind, Australian taxpayers need to make sure they are only submitting legitimate claims for tax deductions and not treating this is a standard tax deduction.