It’s tax time and in the current climate of venue lockdown, that could mean a crucial refund for many hospitality workers. So it’s important to know what you can and can’t claim for.
The ATO has issued a work-related expense guide for hospitality workers outlining the work-related expenses that you may be able to claim deductions for.
Advice from the ATO is, that to claim a work-related deduction:
- you must have spent the money yourself and weren’t reimbursed
- it must be directly related to earning your income
- you must have a record to prove it.
If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion. Common deductions for hospitality workers can include:
- Clothing and grooming expenses
- You can claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job – eg chef’s checked pants and chef’s hat, or protective clothing like aprons that your employer requires you to wear.
- You can’t claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if your employer tells you to wear it, and even if you only wear it for work (eg black pants and a white shirt). You can’t claim a deduction for hairdressing, cosmetics, hair and skin care products, even if your employer expects you to be well groomed. All grooming products are private expenses.
- Tools and equipment expenses
- You can claim a deduction for the cost of the purchase of tools and equipment you are required to use for work, eg chef knives.
- You can claim a deduction for the cost of repairing tools and equipment for work. If the tools or equipment were also used for private purposes, you cannot claim a deduction for that part of the repair cost.
- If a tool or item of work equipment used for work: cost more than $300 – you claim a deduction for the cost over a number of years (depreciation); cost $300 or less – you can claim an immediate deduction for the whole cost.
- You can’t claim a deduction relating to any private use of the equipment or if the tools and equipment are supplied by your employer or another person.
- Self-education expenses
- You can claim a deduction for self-education expenses if your course relates directly to your current job, eg barista course if you are working in a coffee shop.
- You can’t claim a deduction if your study is only related in a general way or is designed to help get you a new job, eg you can’t claim the cost of study to enable you to move from being a food delivery driver to being a chef.
- Car expenses
- You can claim a deduction when you: drive between separate jobs on the same day – eg travelling from your job as a waiter to a second job as a cleaner; drive to and from an alternate workplace for the same employer on the same day – eg travelling from the restaurant you work at to a catering function.
- You generally can’t claim the cost of trips between home and work, even if you live a long way from your usual workplace or have to work outside normal business hours – eg public holidays or night shifts.
- There are limited circumstances where you can claim the cost of trips between home and work, such as where you carry bulky tools or equipment for work.
- If you claim car expenses, you need to keep a logbook to determine the work-related percentage, or be able to demonstrate to the ATO a reasonable calculation if you use the cents per kilometre method to claim.
Other expenses you can claim a deduction for include:
- the work-related portion of phone expenses if you have to make phone calls or send texts for work
- union and professional association fees
- technical or professional publications
- renewing your special employee or gaming licence – you cannot claim a deduction for the cost of getting your initial licence.
The ATO said: “Remember, you’re accountable for the claims you make in your tax return, even if you use a registered tax agent to prepare and lodge it on your behalf. Make sure you have records to prove your claims.”
And while you may be very keen to lodge your claim now, the ATO said that the best time to lodge your tax return is mid-August, when all financial information the ATO receives from employers, banks, government agencies and more, will be pre-filled.
Remember to report all income in your tax return and remove any portion of your expense that is not work-related.
For more information or to download the ATO’s work-related expense guide for hospitality workers go to www.ato.gov.au/HW20.
Written by Andy Young, this article was originally published on TheShout.com.au