Australian workers making claims for work-related clothing expenses are in the sights of the tax office.

July 19, 2017

The tax office doesn’t want the shirt off your back and it doesn’t want you to claim it either.

The ATO has announced a crackdown on work-related clothing deductions after a 20 per cent rise in claims in the past five years.

Assistant tax commissioner Kath Anderson said 6.3 million Australians claimed $1.8 billion in deductions to cover clothes and laundry expenses last year.

“While this increase isn’t a sign that all these taxpayers are doing the wrong thing, it is giving us a reason to pay extra attention,” Ms Anderson said on Wednesday.

“For your clothing to be eligible for a deduction, it needs to be occupation-specific clothing, protective clothing or a uniform that is unique to the organisation you work for.”

Many people have been claiming ineligible clothing, making claims without actually spending any money or not keeping records so they could explain the expense.

Ms Anderson said it was myth workers could claim $150 in deductions for clothing and laundry without actually spending the money.

While record keeping requirements are relaxed for laundry expenses up to this amount, taxpayers do need to be able to show how they calculated the deduction.

Standard or everyday clothing purchased for work use can’t be claimed as a tax deduction even if it is business attire, a certain colour or in keeping with your office dress code.

Earlier this month Tax Office Commissioner Chris Jordan warned a large number taxpayers were using work-related expense deductions to game the tax system through reckless claims as well as legitimate mistakes .

He warned tax agents they would be targeted after investigations revealed a large percentage of people over claiming were lodging their returns using agents.