The AAT has confirmed that a taxpayer, a professional sales commission agent, was not entitled to various work-related deductions and personal investment deductions on the basis he had not discharged the onus of proof in regard to the items in dispute, except in relation to certain minor items.
- The taxpayer during the relevant year was employed by 2 business entities that required him to use his own motor vehicle to visit clients and attend meetings.
- He claimed that as he was not provided with a permanent office by either of his employers, but attended the employers’ offices for sales meetings and used the “hot-desking” method, he could claim deductions for the use of parts of his home as a home office, car space, and other related expenses – as well as various personal investment expenses.
- Originally the taxpayer had claimed over $97,000 worth of expenses, which reduced his taxable income to just over $21,000 in the year in question.
- After various concessions made by the Commissioner, only some $57,000 of expenses remained in dispute.
However, the AAT found that the taxpayer was not entitled to a deduction for the totality of the amounts that remained in dispute. For example, it found that work related travel expenses involving accommodation and meals were not properly substantiated or were of a private nature. The AAT found that, on the basis of the evidence, only 11.7% of expenses (including mortgage interest, heating, lighting, cleaning, insurance, rates etc) should be allowed as a deduction.
The AAT also held that the 25% shortfall penalty for failing to take reasonable care should be maintained in all the circumstances. It also found there were no grounds for reduction to 10% in view of the taxpayer’s medical condition as there was no evidence before the Tribunal of such matters.
(AAT Case [2014] AATA 385, Re Ogden and FCT, AAT, Ref No 2012/5365, Ettinger SM, 20 June 2014.)
[LTN 118, 23/6/14]