ATO expects many laundry claims will be disallowed this tax time
ATO has flagged that it will be checking returns for taxpayers who take advantage of the exemption from keeping receipts when spending less than $150 on laundry expenses. The ATO believes that too many people are claiming this without incurring the expense.
ATO viewed IT as “unlikely” that so many working taxpayers would be required to wear uniforms, protective clothing or occupation-specific clothing to earn assessable income.
Your workplace may expect you to wear clothing items like suits or black pants. But an official ‘dress code’ doesn’t qualify as a uniform and you can’t make a claim for normal clothing, even if your employer requires you to wear it, or you only wear it to work.”
Claiming laundry expense
If you are claiming $150 or less for clothing and laundry (and less than $300 for work-related expenses in total), then:
- Make sure your claim is for eligible clothing (occupation-specific, protective or uniform). Remember you cannot claim for plain or conventional clothing, even if your employer requires you to wear it, and even if you only wear these at work.
- Calculate claim for washing, drying and ironing at:
- $1 per load if the load is made up only of work-related clothing
- 50c per load if they include other laundry items
- The ATO, especially this tax time, may ask for some sort of substantiation to demonstrate how often they wore their eligible clothing (for example, evidence that a taxpayer worked three shifts a week for 48 weeks in a year).
Case studies where clothing claims were knocked back
A retail assistant working in a fashion store claimed more than $700 for store brand clothing she had purchased and was expected to wear to work. As the clothing was conventional, she was not able to claim a deduction, and her claim was disallowed.
A stockbroker claimed the cost of purchasing suits, which he regarded as his ‘work uniform’. While many workplaces have a written or unwritten dress code, his suits are considered conventional or everyday clothing and his claim was refused.
Conventional clothing such as black trousers and a white shirt, or a suit, are not sufficiently distinctive or unique to an employer. Clothing in a specific colour or brand isn’t enough to classify clothing as a uniform.
Contact Expert Tax on 0449 952 855 or 1300 8 MY TAX (1300 869 829) for further assistance with tax related matters.