Earlier this month the ATO published its top 5 most outrageous claims. Talkback radio has seized on this and if the ATO’s list is not bad enough the things that people are willing to disclose on radio are astounding. This highlights two problems.
First, a system that lets the great unwashed loose to self-assess themselves on deductions that can result in large refunds with a large proportion of them getting away with it is simply wrong. Deductions for salary and wage returns should be abolished or standardised by occupation. Any claims outside the standards would be possible but subject to 100% ATO review.
Second, without wanting to sound like a broken record, over-reliance on taxes on income represents a failure of the political system to allow reform recognising the transition beyond the quill and visor
Here we look at the claims mentioned by the ATO in a different context or perspective:
Arguably deductible in the context of a children’s waiting room.
Purchase of a new car
In some instances the cost of a new car can be 100% deductible straight up, under the up to $30k Small Business Instant Asset Write Off.
Sporting equipment or membership fees for child athletes
Businesses may be able to access claims for donations of equipment to clubs or schools, or other forms of sponsorship.
Cost of raising children expenses:
before school care
Definitely out there.
Child care facilities provided by employers can in certain circumstances be deductible and FBT exempt.
Medical expenses claimed as other deductions
Some medical expenses over a threshold were eligible for the calculation of a rebate, however this rebate has been phased out.
Definitely not deductible.
There was a FBT loophole that allowed charities and other tax exempt organisations to package these expenses tax free for their staff.
This has now been capped at $5000.
Again, dental is a personal expense, though in the realms of FBT exemptions a large employer may be able to provide dental facilities as part of a broader in-house occupational health facility