Dodgy tax claims exposed as ATO reveals 'hit list' for 2025: 'Wanted to deduct $30,000'
A pair of swimmers, a luxury yacht and hair care are not acceptable tax deductions.
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Accountants have revealed some of the 'cheekiest' tax claims Australians have tried to sneak past as the Australian Taxation Office (ATO) reveals its 'hit list' for 2025. You might think a luxury yacht or an engagement ring would be a far-fetched deduction, but they were legitimate claims put through last year.
Chartered Accountants ANZ (CA ANZ) recently surveyed 180 Australian tax experts and exposed the extent 'some Australians might stretch the truth to try to get a tax break'. CA ANZ Tax Leader Susan Franks issued a stark warning as she highlighted some of the more ridiculous claims.
'One respondent said their individual client was claiming monthly salon haircuts, on the basis that their hair grows during business hours,' Franks said.
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'There were many dubious claims related to health, wellness and personal aesthetic, including one for the cost of a gym membership, as the individual needed to be strong and fit to renovate their rental property.
'Another related to a Pilates reformer machine purchased to help an office worker who had a sore back.
'We also noticed a trend of big-ticket luxury purchases passed off as business and work expenses, including one who tried to claim a family trip to a tropical island was related to their earthmoving business.'
She said a luxury yacht was claimed as a work expense as 'they might have some business to do on the islands.'
ATO reveals 'hit list' for 2025
More than 10 million people claimed a work-related deduction in 2024, with work-from-home (WFH) deductions one of the most popular.
The ATO said it was targeting exaggerated work-related expenses, WFH deductions and multiple income sources, like side hustles.
ATO Assistant Commissioner Rob Thomson said there was no way outrageous claims like a real estate agent who wanted to deduct $30,000 for veneers or a truckie putting through a pair of swimmers as he stopped at a pool near a highway would fly.
'While some people have tried their luck with unusual work-related deduction claims, most people realise to be able to claim an expense, it needs to meet strict criteria,' Thomson said.
'While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible.
Assistant Commissioner Rob Thomson said the ATO is targeting incorrect work-related expenses this year.
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ATO/Yahoo Finance
'We know in many instances mistakes relating to work-related expenses could be avoided with a little time and effort.'
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