Work-related Travel Expenses

In a general rule, travel expenses which are relevant to gain assessable income are deductible under s8-1 of ITAA to the extent that the expenses are not in a private or capital nature.

Travel within Australia:

A travel diary or similar documents are required for travel within Australia overseas if the employee, director or partner is travelling away from their ordinary residence for 6 nights or more.

No written evidence and travel records are required for travel within Australia if the person receives a travel allowance and claims no more than the amount considered reasonable by the ATO (TD2004/19).
http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD200419/NAT/ATO/00001

If there was no travel allowance paid by the employer, in other words, the allowance amount is not shown in the PAYG summary, the person claims more than the amount considered reasonable by ATO, all travel expenses must be substantiated.

Travel records include:

The nature of the trip
When does it begin?
The length of the trip, and
The destinations

Travel between home and work

In a general rule, travel between home and work is not deductible.

However the following situation may be deductible where:

Home is the place or employment and the travel is between two places of employments
The person’s employment effectively starts from home before leaving to the work place
Heavy tools or equipment stored must be stored at the person’s home at the end of each day and the person must take the equipment from home to his job each day
The person’s nature of work is of an itinerant nature and is required to go to different locations each day

Note: collecting mails on the way to work is not claimable as being insignificant.

Overseas travel

Employee s travelling overseas who received travel allowance still need to obtain written evidence of their travel expenses and detailed travel record if they are away from their ordinary residence for 6 nights or more. Regardless of the length of the trip when a reasonable claim is made, written evidence is required for overseas accommodation expenses, but not for food, drink and incidentals.

Crew members on international flights receiving travel allowance are excluded from this rule if they travel primarily outside Australia and the total expenses claimed do not exceed the ATO reasonable limits.

Reasonable claims for meals and incidentals when travelling overseas are only for employees who receive travel allowance. The reasonable amounts are available for employee only: TD2004/6.

http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20046/nat/ato/00001

Claims for non-employees on business trip must be fully substantiated for claims to be deductible.

The following table contended in TR2004/6 provides a summary of the substantiation requirements:

	Domestic Travel		Overseas Travel
Travel Allowance received and:	Written evidence	Travel diary	Written evidence	Travel diary
The amount claims does not exceed the reasonable allowance amount:
1. Travel less than 6 nights in a row	No	No	No	No
2. Travel 6 or more nights in a row	No	No	No	Yes
The amount claims exceeds the reasonable allowance amount:
3. Travel less than 6 nights in a row	Yes – for the whole claim	No	Yes	No
4. Travel 6 or more nights in a row	Yes – for the whole claim	Yes	Yes	Yes

DISCLAIMER

Kasker Associates website is to provide information of general interest to their clients. The content of this website does not constitute specific advice. Readers are encouraged to consult their tax adviser for advice on specific matters.