Why accountants are worried about Labor's new tax change (2025)

Australians filing their tax returns to claim up to $1,000 on work-related expenses without a receipt under a re-elected Labor government could miss out on a full refund, accountantswarn.

Anthony Albanese and his Treasurer Jim Chalmers said this proposed policy, which would into effect on July 1, 2026 if the government is re-elected next month, would benefit the 39 per cent of taxpayers - adding up to 5.7million workers who typically claimed less than $1,000 a year on their tax claim.

'It means more than one in three taxpayers will only need to make six clicks to tick their tax return,' they said.

Under existing rules, Aussies can claim up to $300 in work-related expenses without needing receipts but that rises to $1,000 for the 2026-27 financial year when annual returns are submitted to the Australian Taxation Office.

Jenny Wong, the tax leader for CPA Australia - representing Certified Practising Accountants - fears Australians will miss out on tax deductions under the proposal.

'Allowing taxpayers to choose to claim a $1,000 instant tax deduction instead of claiming individual work-related expenses may save some workers a bit of time - but could mean they miss out on the full refund they are entitled to,' she said.

Ms Wong said Labor's policy would see taxpayers who normally only made small deductions claim the $1,000 from the new instant tax deduction policy - costing the government much needed revenue.

'Further, previous modelling has shown that a standard deduction would cost government and taxpayers much more than it brings in revenue,' she said.

'This makes it not only inefficient but also provides tax breaks to those who don’t have legitimate work-related expenses.

'Taxpayers should be encouraged to take greater responsibility for their finances and tax obligations.

'Clicking a few buttons to get a basic deduction may be easy, but it is unlikely to be in the best interests of taxpayers or the economy.'

But H&R Block's director of tax communications Mark Chapman said the new $1,000 threshold to make tax claims without a receipt would see more scrutiny placed on Australians who made bigger tax deductions.

'The ATO will not need to audit taxpayers who claim the standard deduction,' he said.

'This will enable them to focus on higher tax claims - including work-related deductions over $1,000 - which is sure to increase the pressure on taxpayers to make sure they have the necessary records to support their claim.'

Under existing rules, Australians now have to provide receipts for everything if they exceed the $300 threshold.

Mr Chapman said Labor had failed to properly explain how the new $1,000 threshold would work.

'It remains to be seen how Labor implements this proposal,' he said.

'Will it be a blanket exception for all work-related expenses of less than $1,000 or will it simply piggy-back on the existing $300 exception - raising the threshold by $700 - complete with its exclusions and checks?'

Mr Albanese and Mr Chalmers hailed the new $1,000 threshold as a measure that would save Australians $200million a year in record keeping.

'This is tax reform that cuts red tape and relief that comes on top of our new tax cuts for every taxpayer, helping Australians keep more of what they earn,' they said.

Charitable donations and other non-work related expenses would still be claimable on top of the instant tax deduction's $1,000 receipt-free threshold.

The instant tax deduction change, from $300 to $1,000, will cost the Budget $2.4billion over three years with Labor arguing it would save the average Australian $205 a year on their tax bill.

Jim ChalmersAnthony Albanese

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