ATO to iron out clothing expense claims

The Australian Taxation Office is sceptical about the validity of many of the claims made for clothing and laundry expenses. Clothes bought to meet a dress code don’t qualify as uniforms.

Last year, six million people claimed work-related clothing and laundry expenses totalling almost $1.5 billion.

ATO assistant commissioner Karen Foat says it is unlikely that half of all taxpayers are required to wear uniforms, protective clothing or occupation-specific clothing to earn their income.

Foat says last year half a quarter of all clothing and laundry claims were exactly at the record-keeping limit of $150.

“While you don’t need receipts for claims up to $150, we can ask how you calculated your claim. We may even ask your employer if you have a required uniform,” she says.

“You must have spent the money you are claiming on buying or cleaning eligible clothes. Don’t think we won’t scrutinise a claim because we don’t require receipts.”

Foat says some retail workers claim normal clothes because their boss told them to wear a certain colour or an item from the latest fashion line. Others think they can claim normal clothes because they only wear them to work.

“An official dress code doesn’t qualify as a uniform and you can’t make a claim for normal clothing,” she says.

The ATO’s data analytics flags claims by people in occupations that usually don’t claim for clothes, such as office workers, and it highlights above-average claims by people in occupations that regularly claim for laundry, such as chefs and security guards.

The ATO allows claims for washing, drying and ironing at $1 per load if the load is made up of only work-related clothes. People who claim may be asked to demonstrate how often they wear eligible clothes (for example, evidence of their shifts).