These same people will usually try to justify the tax deduction when asked, but many times this so called ‘justification’ is far reaching.
One of these common deductions is claiming 5,000 kilometres of motor vehicle travel – 5,000 is actually a long way and it is difficult to substantiate when you job is primarily based in an office.
One taxpayer recently tried this on the basis that they were required to transport sensitive information to and from work and thus claimed the 5,000 kilometres.
The snag was that the sensitive information he was carrying related to his own personal design work and was not at all related to his paid employment, and his employer never asked him to transport any sensitive information between his workplace and home.
The result – deduction denied and 25% administrative penalty imposed.
The lesson – be careful, and make sure you do the right thing!