ATO catches salesman who tried to claim “disgraceful” work-related expenses, including secretarial services performed by his 7-year-old son and cheese in a can

A Sydney man will have to pay a hefty penalty after the Australian Taxation Office discovered he was falsely claiming thousands of dollars on work-related expenses for items such as 39 packets of Monte Carlo biscuits and cheese in a can.

Gary Ogden was previously employed as a salesperson for IBM Australia. During his employment he was allowed to work from home and for the 2011 financial year claimed more than $50,000 on work-related expenses.

In 2012, the former salesperson claimed just under $50,000 in work-related expenses.

However the ATO disallowed various tax deductions for the 2011 and 2012 financial years.

The tax office also imposed a penalty on the basis Ogden or his agent had “failed to take reasonable care” or comply with tax law when claiming the work-related expenses.

Ogden disputed this and took the matter to the Administrative Appeals Tribunal.

During the hearing, deputy president Stephen Frost heard evidence that Ogden had tried to claim $5388 for secretarial services completed by his son. However, his son was around 7-years-old at the time.

“I find that Mr Ogden’s son did virtually nothing for his father by way of secretarial assistance or anything of that nature,” deputy president Frost said in his judgment.

“Indeed, the evidence established no more than that the son sometimes ran upstairs to the study when the phone was ringing, answered the phone and then handed it to his father.”

The tribunal also found Ogden paid his son nowhere near $5,388 as claimed for the 2012 income year, casting the former salesperson “in a most unfavourable light”.

In addition, the tribunal heard Ogden tried to claim thousands of dollars of groceries as work related expenses.

The groceries included cheese in a can and 39 packets of Monte Carlo biscuits.

During the proceedings, Frost remarked it would be a “strange thing” to offer business partners or clients cheese from a can and said it was more likely the groceries were being put towards children’s lunches.

As a result Ogden’s case was dismissed and a penalty will be handed down in the coming weeks.

Is it a good idea for employers to help educate their workers about what they can and can’t claim?

Margaret Harrison, managing director of Our HR Company, says businesses should not be too concerned about an individual’s tax affairs.

“From an HR perspective, employers do enough,” Harrison says.

“Employers are overwhelmed with stuff they have to do like managing careers leave, managing part-time workers. Quite frankly, tax is everyone’s personal business and employers don’t need to get involved in that.

There’s lots of tax advice you can get online – so they should just go there.”

IBM Australia confirmed to SmartCompany that Ogden no longer works for the company and has not worked there for several years.

SmartCompany was unable to contact Ogden for comment.