A professional sales commission agent has been largely unsuccessful before the AAT in claiming deductions for work-related expenses, including home office expenses, various grocery items and overtime meal allowances. The taxpayer had similar deductions disallowed by the AAT in Re Odgen and FCT [2014] AATA 385 in respect of a different income year.

In the current proceedings, the taxpayer claimed over $63,000 in deductions in his 2011 tax return and over $53,000 in his 2012 tax return, which represented at least 30% of his employment income. The Commissioner disallowed various deductions and applied a 25% shortfall penalty for failing to take reasonable care. When the matter came before the AAT, the claims that were still in dispute included the amount of home office expenses, overtime meal allowances and “staff and client amenities” (including toilet paper, Bega Stringers Cheese and Weight Watchers Lamingtons). The Tribunal found that the taxpayer’s home office claims were “wildly excessive” and his claim that his family living room was used solely for work meetings “should never have been made”. The Tribunal also rejected everything claimed under “staff and client amenities”, because it was of the view the products were overwhelmingly consumed by the taxpayer’s family. The claimed meal allowances were also rejected in their entirety.

Considering the various deductions claimed, the Tribunal said that a 25% administrative penalty appeared “somewhat generous” to the taxpayer. The Tribunal gave leave to the Commissioner to consider whether to apply a 20% uplift, given the numerous statements made by the taxpayer and how they changed over time. It also noted that different levels of culpability may apply to different statements.

(Re Ogden and FCT [2016] AATA 32, AAT, File Nos 2014/5943; 2014/5957; 2014/6763; 2014/6764, Frost DP, 29 January 2016.)

[LTN 19, 1/2/16]