TRAVEL AND ACCOMMODATION EXPENSES

Other travel expenses you have incurred as an employee that you may be able to claim as a deduction include:

  • expenses you incurred for meals, accommodation and incidentals when travelling away overnight for work, such as going to an interstate work conference (generally, you can’t claim for meals if your travel did not involve an overnight stay)
  • the costs you incur for driving your car (such as fuel, oil, repairs and maintenance costs) when using someone else’s car or other vehicle that is not defined as a car for work purposes
  • air, bus, train, tram and taxi fares
  • bridge and road tolls
  • car parking and car-hire fees.

Vehicles other than cars are motorcycles, scooters, vehicles with greater than one tonne carrying capacity such as trucks or heavy vehicles or a van with capacity for nine or more passengers.

You can’t claim:

  • the purchase of other vehicles, but you can claim the decline in value of the vehicle over its effective life
  • a deduction for
    • any fines you receive, such as speeding or parking infringements
    • normal daily trips between home and work – this is private travel.

 

You have to reduce your claim to exclude any private portion of your trip.

If you receive a travel allowance

Receiving a travel allowance from your employer does not automatically entitle you to a deduction. Travel allowances may or may not be shown on your income statement or payment summary.

If it’s on your income statement or payment summary, you will need to:

  • include the allowance in your tax return
  • claim a deduction for the amount you spent on deductible expenses.

If it’s not on your income statement or payment summary and you spent the full amount on deductible expenses, you can either:

  • not include the allowance in your tax return and not claim a deduction for your expenses
  • include the allowance in your tax return and claim a deduction for the amount you spent on deductible expenses.

If it’s not on your income statement or payment summary and you didn’t spend the full amount on deductible expenses, you will need to:

  • include the allowance in your tax return
  • claim a deduction for the amount you spent on deductible expenses.

If you claim more than the reasonable allowance amount we set, you need to keep records of your expenditure.

Accommodation allowances and expenses when travelling away from home for work

As a general rule, you must declare any travel allowance you receive as income in your tax return.

You do not have to declare the allowance as income in your tax return if all of the following apply:

  • the travel allowance is not shown on your income statement or payment summary
  • the travel allowance doesn’t exceed the Commissioner of Taxation’s reasonable allowance amount
  • you spent the whole allowance on deductible accommodation costs (and meal and incidental expenses, if applicable).

If you don’t declare your allowance as income, you can’t deduct your accommodation costs (and meal and incidental expenses, if applicable) – even if they are more than your allowance.

You can claim a deduction if the allowance you received has been folded into your salary and wages. You must keep written evidence of your expenditure.

Accommodation expense claims

You can deduct your accommodation costs (as well as meal and incidental expenses), if all of the following apply. You:

  • declare any travel allowance you receive as income on your tax return
  • are required as part of performing your work duties to travel away from home
  • are only working away from home for relatively short periods of time (you aren’t living away from home)
  • did not incur the expenses because of a choice you made to maintain your residence in a different location to your place of employment
  • have a permanent home at a location away from the work location that you are travelling to
  • pay for the accommodation yourself and aren’t reimbursed for the costs you incur.

Keeping records for accommodation

To claim a deduction, you generally need to keep written evidence to substantiate your costs.

Substantiation isn’t required if:

  • you have received a travel allowance for travel within Australia
  • the deduction you claim for accommodation (and meals and incidental expenses, if applicable) is equal to or less than the amount we consider reasonable.

The amounts we consider reasonable are published each year.

Even where you don’t need to substantiate your costs, we may still ask you to show all of the following:

  • you paid the expense yourself
  • the cost is deductible – you met the conditions required to deduct the expense
  • you received a travel allowance
  • you stayed in short-term commercial accommodation.

See also: TD 2019/11 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2019–20 income year?

Claiming expenses for accommodation you purchase or rent

Most people required to travel away from home temporarily to perform their work duties stay in short-term commercial accommodation. For example a hotel, motel or serviced apartment. However, a person may decide to stay in rented accommodation or in accommodation they have purchased.

The costs of financing, holding and maintaining accommodation you

purchase or rent to stay in when you travel to perform your work duties may be deductible as work-related travel expenses.

You must declare any travel allowance you receive as income in your tax return if you want to claim a deduction for your accommodation costs (as well as meal and incidental expenses).

Types of costs

Costs you can claim:

  • rent
  • interest on loans used to purchase the accommodation
  • rates
  • taxes
  • insurance
  • general maintenance of the accommodation
  • the decline in value of certain assets, such as furniture and household equipment.

 

Contact us

To contact our tax consultant to claim your deductions and advice at click on

Book Your Appointment

https://taxbook.com.au/

Ph 13 75 77 75

Disclaimer

This reading material was extracted from Australian Tax Office (ATO) website on 24 June 2020. This post and the information therein is for general information only and does not constitute legal, financial or taxation advice from PTB. Other requirements under tax law may apply and may change. If you wish to act on any of the material in this video, you should contact PTB for professional advice that takes into account your own specific circumstances.

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