TaxRambling.com

I have been waiting for a case like this for some time.

In Spencer and Commissioner of Taxation [2021] AATA 1106, the taxpayer claimed all his home internet and all his phone costs (including buying the phone). His employer had given him a work phone and a tablet with a SIM card so he could access the internet on both these devices.

Yes there was no way he was getting away with all the costs, but the Commissioner only gave him $50 for the internet for the year and $50 for the phone and calls for the entire year.

So what does the AAT say about claiming internet charges…

Assessing the amount of work-related internet usage by Mr Spencer is extremely difficult in the absence of reliable contemporaneous records. The Tribunal is not assisted by the internet usage Mr Spencer recorded in June and July 2020 given it is well outside the periods in dispute, there is no evidence that it is in anyway an accurate approximation of Mr Spencer’s use during the relevant periods, and Mr Spencer has not provided sufficient information for the Tribunal to determine which parts of Mr Spencer’s usage related to his employment and which did not.

paragraph 51 of Spencer and Commissioner of Taxation (Taxation) [2021] AATA 1106

He tried to prove his 2017 and 2018 use by keeping a record of June 2020 and the AAT said that was not good enough.

And the AAT says the same thing about the phone charges…

There is simply insufficient evidence before the Tribunal to be satisfied that Mr Spencer is entitled to the deductions he has claimed, particularly as Mr Spencer did not keep contemporaneous records of usage. It follows that the Tribunal does not accept that Mr Spencer has satisfied the onus on him with regards to his mobile telephone expenses.

paragraph 57 of Spencer and Commissioner of Taxation (Taxation) [2021] AATA 1106

If you cannot PROVE, not GUESS but PROVE, a business percentage of your phone and internet, all you will get is $50 for each if the tax return is audited.

I should say he is lucky to get the $50. Throughout the audit he “forgot” to mention the work phone given to him by his employer and the ATO only found out about it when talking to his employer. I imagine he felt that claiming 100% of his personal phone was business would be hard if he told them he had a work phone paid for by his employer…