Tax agents helping clients overclaim expenses are on notice after a Victorian accountant had his licence terminated for, among other things, claiming family pets as guard dogs.
The Tax Practitioners Board (TPB) alleged Wollongong-based accountant David Warren McNeice, partner of now-closed firm DW & AR McNeice, made a number of dodgy expense claims.
The activity, originally flagged by the ATO and passed on to the TPB for follow up in the Administrative Appeals Tribunal (AAT), involved alleged “intentional disregard” for taxation law and breaches of the Code of Professional Conduct.
It was alleged McNeice made the claims between 2010 and 2014, including:
- Claiming family pets as guard dogs;
- Claiming personal training and school fees as “conference expenses”;
- Claiming food purchases as “staff and client amenities”;
- Depreciating a household fridge for a plumber; and
- Claiming personal training sessions for a sales agent.
The ATO has been keeping a close eye on expense claims recently as they remain one of the most popular ways to rip-off taxpayers.
TPB chief executive Michael O’Neill said McNeice’s disallowed claims weren’t consistent with the board’s view of a “fit and proper” person.
“Tax practitioners must undertake their role truthfully, accurately and competently to uphold the integrity of the profession and what is ultimately best for taxpayers and the overall integrity of the tax and super systems,” O’Neill said in a statement circulated on Wednesday evening.
David McKellar of Allied Business Accountants says it’s good to see the TPB cracking down on dodgy expense claims.
“The ATO has been targeting taxpayers that have been overclaiming, and they have also been targeting clients of tax agents where the deductions of the tax agents’ clients were on average higher than that of other agents or taxpayers preparing their own returns,” he tells SmartCompany.
Mckellar says businesses should think twice before trying to inflate their deductions, as the risks are high.
“The practice of inflating or overclaiming deductions is short-sighted and doesn’t really benefit the client. It creates significant risks, and the cost of audits, penalties, interest and possible prosecution far outweigh the cash benefit gained from the ‘tax fraud’,” he says.
“If all have been done legally to minimise your tax, then having tax to pay is actually a good sign you are making money.
“If you need to increase your income or cashflow, you are would be better focusing your time energy on growing your business, improving its profitability or finding additional sources of income.”
McNeice was unable to be contacted for comment, his Woolongong based firm’s phone number has been disconnected and website shut down.