You've got to admire the creativity. An Australian tradie recently tried to claim $300 worth of bamboo underwear as a tax deduction, reasoning that the more comfortable undies helped him work better. The Australian Taxation Office wasn't having any of it.
'While we support his underwear choice, that claim's been denied!' the ATO announced on social media. 'Undies are a personal expense and can't be claimed as a deduction.'
But this brazen underwear bid is just the tip of the iceberg when it comes to Australians trying their luck at tax time.
A rogues' gallery of rejected claims
The ATO has revealed some truly spectacular deduction attempts from the past year, including a mechanic who tried to claim an air fryer, microwave, two vacuum cleaners, a TV, and gaming equipment as work-related expenses. All were denied as personal expenses.
Then there was the truck driver who attempted to claim swimwear, justifying it as necessary for roadside swims during hot transit stops. A fashion industry manager also tried to claim over $10,000 in designer clothes and accessories to maintain a polished appearance at events and functions.
'While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible.'
The scale of work-related deductions is enormous—in 2024, more than 10 million Australians claimed work-related deductions, with many claiming expenses related to working from home.
The 'pub test' explained
You might have heard the ATO mention the 'pub test' when discussing deductions, but what does it actually mean? According to ATO Assistant Commissioner Rob Thomson, work-related expenses must have a 'close connection' to your income-earning activities, and you need to be prepared to back it up with records like receipts or invoices.
'If your deductions don't pass the 'pub test', it's highly unlikely your claim would meet the ATO's strict criteria,' Thomson explained.
What is the 'pub test'?
The pub test is a simple way to evaluate whether an expense is genuinely work-related. Ask yourself: 'If I explained this deduction to my mates at the pub, would they think it's reasonable for work?' If the answer is no, it probably won't fly with the ATO either.
The bamboo underwear certainly sparked debate online, with some arguing it could qualify as personal protective equipment. One commenter suggested: 'PPE against chaffing?' while another joked: 'If they are hi-vis, they are deductible.'
But the ATO was clear: 'A tradie wouldn't be able to claim their underwear as a PPE deduction. Bamboo underwear may minimise friction, however they aren't designed specifically with protective qualities to protect against the risk of illness or injury when carrying out work.'
What you actually CAN claim
While designer underwear is off the table, there are legitimate work-related clothing and equipment deductions available. You can claim personal protective equipment that's directly connected to earning your employment income and protects you from workplace risks.
Legitimate PPE deductions include:
- Hard hats and safety helmets
- Safety goggles and protective eyewear
- Earplugs and hearing protection
- Work gloves designed for specific tasks
- Face masks and shields
- Hand sanitiser and antibacterial spray (when required for work)
The key test is that the item must be designed specifically to protect against workplace risks of illness or injury.
Current rates you need to know
For the 2024-25 financial year, the fixed rate for working from home expenses is 70 cents per hour. This is particularly relevant for seniors who might be doing consultancy work or small business activities from home.
The rate for work-related car expenses is 88 cents per kilometre for 2024-25. If you're travelling for work purposes, this rate covers fuel, maintenance, insurance, and depreciation.
Important changes ahead
There's a significant change coming that affects anyone who's had to pay ATO interest charges. From 1 July 2025, interest charges imposed by the ATO will no longer be tax deductible. However, any interest charges incurred before this date will remain deductible for the 2024-25 and earlier income years.
Time is running out
There's also good news for those needing help with their tax returns—the Tax Help program income limit has increased from $60,000 to $70,000 for those with simple tax affairs. From July to October, ATO-trained volunteers can help you lodge your tax return online using myTax.
Record keeping is crucial
When claiming deductions, you need to keep records that show you incurred the expense. If the total amount of deductions you're claiming is more than $300, you must have written evidence such as receipts or invoices.
These records need to be kept for five years from the date you lodge your tax return.
Did you know?
Did you know?
The ATO's Assistant Commissioner Rob Thomson reminds taxpayers that while some people try their luck with unusual claims, most people realise expenses need to meet strict criteria. The ATO's role is to collect the correct amount of tax owed, and exaggerated deduction attempts won't be tolerated.
What this means for seniors
Many seniors work in consulting roles, run small businesses, or take on part-time work that might involve legitimate deductions. The key is understanding what passes the pub test and keeping proper records.
Example Scenario
- Margaret, 67, works as a part-time bookkeeper from her home office. She can legitimately claim her working from home expenses at 70 cents per hour for the time she spends working. She keeps a simple diary noting her work hours and has receipts for any office supplies she purchases. When she drives to client meetings, she records the kilometres and claims at 88 cents per kilometre.
The ATO's message is clear: they'll be focusing on areas where they see frequent errors, including work-related expenses, working from home deductions, and multiple income sources. If you're not sure what you can claim, check the ATO website for detailed guidance or ask a registered tax professional.
The bottom line
While the tradie's bamboo underwear gambit didn't pay off, it's sparked an important conversation about what constitutes a legitimate work expense. The ATO isn't trying to be unreasonable—they just want to ensure claims are genuinely work-related and properly substantiated.
So before you try claiming that new coffee machine as essential office equipment, ask yourself: would this pass the pub test?
Have you ever been tempted to try a creative tax deduction, or do you have questions about what you can legitimately claim? Share your thoughts and experiences in the comments below—we'd love to hear your stories about navigating the sometimes confusing world of tax deductions!
Original Article
https://au.finance.yahoo.com/news/a...-wild-300-tax-deduction-denied-201549447.html
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: Some of the most outrageous deduction attempts the ATO saw last year included: A mechanic tried to claim an air fryer, microwave, 2 vacuum cleaners, a...
Excerpt: The ATO has revealed some truly spectacular deduction attempts from the past year, including a mechanic who tried to claim an air fryer, microwave, two vacuum cleaners, a TV, and gaming equipment as work-related expenses.
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
EOFY 2025: ATO’s Weirdest Rejected Tax Deductions and What You Can Claim
Cited text: Some of the most bizarre work-related expense claims rejected last year include: A mechanic who tried to deduct an air fryer, microwave, two vacuum cl...
Excerpt: The ATO has revealed some truly spectacular deduction attempts from the past year, including a mechanic who tried to claim an air fryer, microwave, two vacuum cleaners, a TV, and gaming equipment as work-related expenses.
https://lawpath.com.au/blog/ato-weirdest-rejected-tax-deduction-claim
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: The claim was denied as these expenses are personal in nature.
Excerpt: All were denied as personal expenses.
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
EOFY 2025: ATO’s Weirdest Rejected Tax Deductions and What You Can Claim
Cited text: A truck driver who attempted to claim swimwear, justifying it as necessary for roadside swims during hot transit stops.
Excerpt: Then there was the truck driver who attempted to claim swimwear, justifying it as necessary for roadside swims during hot transit stops.
https://lawpath.com.au/blog/ato-weirdest-rejected-tax-deduction-claim
EOFY 2025: ATO’s Weirdest Rejected Tax Deductions and What You Can Claim
Cited text: A fashion industry manager who claimed over $10,000 in designer clothes and `accessories to maintain a polished appearance at events and functions.
Excerpt: A fashion industry manager also tried to claim over $10,000 in designer clothes and accessories to maintain a polished appearance at events and functions.
https://lawpath.com.au/blog/ato-weirdest-rejected-tax-deduction-claim
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: In 2024 more than 10 million people claimed a work-related deduction, and many of those claimed a deduction related to working from home.
Excerpt: The scale of work-related deductions is enormous—in 2024, more than 10 million Australians claimed work-related deductions, with many claiming expenses related to working from home.
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: ‘Work-related expenses must have a close connection to your income earning activities, and you should be prepared to back it up, with records like a r...
Excerpt: According to ATO Assistant Commissioner Rob Thomson, work-related expenses must have a 'close connection' to your income-earning activities, and you need to be prepared to back it up with records like receipts or invoices.
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
What's new for individuals | Australian Taxation Office
Cited text: The fixed rate for work from home expenses for 2024—25 is 70c per hour.
Excerpt: For the 2024-25 financial year, the fixed rate for working from home expenses is 70 cents per hour.
https://www.ato.gov.au/individuals-...re-your-tax-return/what-s-new-for-individuals
What's new for individuals | Australian Taxation Office
Cited text: The cents per kilometre rate for work-related car expenses for 2024—25 is 88c per kilometre.
Excerpt: The rate for work-related car expenses is 88 cents per kilometre for 2024-25.
https://www.ato.gov.au/individuals-...re-your-tax-return/what-s-new-for-individuals
Denying deductions for ATO interest charges | Australian Taxation Office
Cited text: Taxpayers can no longer claim an income tax deduction for ATO interest charges incurred on or after 1 July 2025.
Excerpt: From 1 July 2025, interest charges imposed by the ATO will no longer be tax deductible.
https://www.ato.gov.au/about-ato/ne...sses/deny-deductions-for-ato-interest-charges
Important tax update: ATO interest charges no longer deductible from 1 July 2025—LDB Group
Cited text: From 1 July 2025, interest charges imposed by the ATO will no longer be tax deductible in your income tax return.
Excerpt: From 1 July 2025, interest charges imposed by the ATO will no longer be tax deductible.
https://www.ldb.com.au/tax-complian...harges-no-longer-deductible-from-1-july-2025/
Important tax update: ATO interest charges no longer deductible from 1 July 2025—LDB Group
Cited text: GIC and SIC incurred before 1 July 2025 will remain deductible for the 2024—25 and earlier income years.
Excerpt: However, any interest charges incurred before this date will remain deductible for the 2024-25 and earlier income years.
https://www.ldb.com.au/tax-complian...harges-no-longer-deductible-from-1-july-2025/
What's new for individuals | Australian Taxation Office
Cited text: If you earn $70,000 or less and have simple tax affairs, you can access free assistance through our program (previously the income limit was $60,000)....
Excerpt: There's also good news for those needing help with their tax returns—the Tax Help program income limit has increased from $60,000 to $70,000 for those with simple tax affairs.
https://www.ato.gov.au/individuals-...re-your-tax-return/what-s-new-for-individuals
What's new for individuals | Australian Taxation Office
Cited text: From July to October, ATO-trained volunteers can help you lodge your tax return online using myTax.
Excerpt: From July to October, ATO-trained volunteers can help you lodge your tax return online using myTax.
https://www.ato.gov.au/individuals-...re-your-tax-return/what-s-new-for-individuals
Claiming deductions 2025 | Australian Taxation Office
Cited text: When you claim a deduction, you need to keep records that show you incur the expense.
Excerpt: When claiming deductions, you need to keep records that show you incurred the expense.
https://www.ato.gov.au/forms-and-in...dual-tax-return-2025/claiming-deductions-2025
Claiming deductions 2025 | Australian Taxation Office
Cited text: If the total amount of deductions you're claiming is more than $300, you must have written evidence (such as a receipt or invoice) to show you incur a...
Excerpt: When claiming deductions, you need to keep records that show you incurred the expense.
https://www.ato.gov.au/forms-and-in...dual-tax-return-2025/claiming-deductions-2025
Claiming deductions 2025 | Australian Taxation Office
Cited text: You need to keep records for 5 years (in most cases) from the date you lodge your tax return.
Excerpt: These records need to be kept for five years from the date you lodge your tax return.
https://www.ato.gov.au/forms-and-in...dual-tax-return-2025/claiming-deductions-2025
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: ATO Assistant Commissioner Rob Thomson reminded taxpayers that the ATO’s role is to collect the correct amount of tax that is owed, and exaggerated de...
Excerpt: The ATO's Assistant Commissioner Rob Thomson reminds taxpayers that while some people try their luck with unusual claims, most people realise expenses need to meet strict criteria.
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: ‘While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible.’ · ‘We know in many instances mistakes r...
Excerpt: they'll be focusing on areas where they see frequent errors, including work-related expenses, working from home deductions, and multiple income sources.
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: ‘If you’re not sure what you can or can’t claim, check the ATO website for detailed guidance, or ask your registered tax professional, if you have one...
Excerpt: If you're not sure what you can claim, check the ATO website for detailed guidance or ask a registered tax professional.
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
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