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Laundry and clothing expenses

Continuing its focus in recent years on work-related expenses, this Tax Time the ATO says it will target false clothing and laundry work-related expense claims.

In 2018 alone, more than 6 million people claimed work-related clothing and laundry expenses totalling nearly $1.5 billion.

ATO Assistant Commissioner Karen Foat said while many Australians can claim clothing and laundry expenses, “it’s unlikely that half of all taxpayers are required to wear uniforms, protective clothing or occupation-specific clothing to earn their income”.

“You must have spent the money you are claiming on buying or cleaning eligible clothes. 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,” Ms Foat said.

Last year, she said a quarter of all clothing and laundry claims were “exactly at the record-keeping limit. But don’t think that we won’t scrutinise a claim because we don’t require receipts,” she said.

The ATO is also concerned about the number of people claiming deductions for conventional clothing. Some retail workers claim normal clothes because their boss told them to wear a certain colour, or items from the latest fashion clothing line. Others think they can claim normal clothes because they only wear them to work.

The Assistant Commissioner said a workplace may expect an employee to wear clothing items like suits or black pants. But an official ‘dress code’ doesn’t qualify as a uniform, she said, and taxpayers can’t make a claim for normal clothing, even if their employer requires them to wear it, or they only wear it to work.

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