Unfortunately, there seems to have been a lot of misinformation out there and some taxpayers will be caught out if they are audited, with incorrect deductions, tax to repay, penalties and interest.
The Australian Taxation Office (ATO) made it clear at the start of this tax season that one of their identified audit areas would be travel deductions in 2014 income tax returns.
The latest news on this matter, is that the ATO are now following through on this 'threat' and have noticed the "trend/pattern" of travel deductions in Gladstone resident's income tax returns, and now they are starting to make enquiries.
Just last week, one large employer in Gladstone received a telephone call from the ATO asking questions to "get clarity" on how and when the employees of the company travel and use their own vehicles for "work purposes". Questions such as, "do your employees have to travel between sites in their own vehicles" and "do they have to carry their own tools and bulky equipment" are clearly pointed towards travel and vehicle deductions claimed in individual returns.
Once again, we remind you, it's YOUR income tax return, and its YOUR responsibility to ensure your deductions are correct and that you have the appropriate substantiation/evidence to support your claims. Even if someone else (including a tax agent) prepares your return, the onus is on YOU. You will be the one required to repay the tax, the penalties and the interest. Oh and if you think "audit insurance" will 'save' you, make sure you understand what this insurance really covers.
For professional, ethical advice, please call our Sothertons Gladstone team on 4972 1300.