Recently, the ATO has updated new audit targets to maintain the health of the tax systems, and make sure that all taxpayers pay their fair share.

There are a lot of taxpayers mistakenly claiming their deductions or trying to evade paying tax.

Some of the areas that the ATO have stated it will be focusing on are:

  • Work- related expenses:
    • Overnight travel;
      • You can’t claim a deduction for the travel expenses if your employer reimburses your expenses, and you live away from your usual home to perform your work.
    • Motor vehicle expenses for travelling between home and work; and
    • The work-related proportion of use for computers, phones and other electronic devices.
      • The ATO is targeting the percentage value of work-related use compared to personal use, not the actual cost of the devices.
    • Rental property expenses:
      • Excessive deductions being claimed for holiday homes (deductions should be limited to the amount of income earned, or to the number of days actually rented out at a commercial rate);
        • ATO has recently sent out letters to taxpayers in about 500 postcodes across Australia, reminding them to claim their deductions correctly regarding the investing properties.
      • Husbands and wives inappropriately splitting rental income and deductions for jointly owned properties; and
        • This inappropriately splitting is trying to take the advantage for the highest income earner.
      • Interest deductions being claimed for the private proportion of loans.
        • If the property owner refinances and uses part of the money for personal use , they should have only claimed the portion of interest that relates to the rental property.
      • Tax professionals failing their own obligations, such as lodging returns and paying liabilities.
      • Cash economy:
        • The building and construction industry; and
        • The restaurant, café and takeaway industry.
          • ATO had recouped $200 million through 10,000 audits of businesses that were found to be hiding cash transactions.
        • Contractors
          • Employers misusing contracting arrangements with the intention of avoiding employment overheads.


For more detailed information on how this could affect you, please contact us on 07 5444 1022 or email