Work-related travel deductions
Work related travel is a common deduction claimed annually. A trip as part of your occupation will incur costs whether they are short to see a client or interstate. These costs typically are tax deductable while the ATO keeps a close inspection on incorrect claims around travel.
Claims must be for travel expenses whilst working. This in effect generally excludes your commute between your workplace and home. This may mean that you can claim for:
-Travelling between worksites during the work day;
-Travelling between a primary and secondary workplace where there is no home visit between;
-Travel to business related meetings, prospective clients or suppliers; and
-Travelling to work related training courses.
Claims are made via two different means.
For claims under 5,000km's the prescribed method is to claim based upon cents per km. The flat rate of 66 cents per kilometre is claimable under the aforementioned circumstances.
For claims over 5,000km's a logbook is required. The logbook the record keeping will involve more work for claims this size, though do more accurately give returns compared to your travel expenses. All journeys must be exhaustively noted for a representative 12 week period. Both business and private journeys for the vehicle must be recorded including if the journey was business or private use. This is used to work out the proportion of the vehicle use for business. This logbook proportion is valid for up to five years and can be applied to the expenses for the entire duration provided it is the same workplace etc. Further to this logbook period, one will need to keep receipts and invoices for all expenses on the noted vehicle. While all of the cost cannot be claimed an appropriate percentage of the business travel cost is claimable.
Travel from home to work is considered a private expenditure. An exception to this rule is where your employer requires bulky tools in your vehicle that cannot be secured safely at work. These claims are very specific and rigorously assessed, so be careful what you try to claim there. More often than not these claims are disallowed when assessed by the ATO illustrating the fine line of what is legitimate around home to work travel claims requiring legitimate tools to be stored.
Naturally there are other travel expenses that may be claimed where they are not reimbursed by an employer. Such claims include;
-Public transport fares
Speeding and parking infringements, as well as other motor vehicle infringements are not claimable.
Overnight travel expenses
When you are required for work purposes to travel overnight then you can claim a deduction for meals, accommodation and incidental expenses, so long as these are not reimbursed by your employer.
Some people who travel extensively are paid an allowance by their employer to cover those costs. Those allowances are taxable but a deduction can then be claimed for costs incurred.
The ATO updates reasonable amounts of expenditure to claim annually. The claimable travel expenditure amounts list includes meals, accommodation and incidentals from overnight stays required for business activities. Provided you’ve received an allowance from your employer and you’ve claimed less than the amounts specified by the ATO, you don’t need to keep detailed records such as invoices and receipts. If you spend more than the ATO reasonable amounts (or you don’t get paid an allowance), you must keep detailed records.
The ATO extensively audits these claims. The amounts specified by the ATO are not automatically claimable. You can only claim from the amount you actually spent. Record keeping of expenditure is always a good thing anyway to be in the habit of. The neater the records the better for you.
Even if you haven’t kept detailed records (and aren’t obliged to keep them because of the exemption), you still need to be able to prove that you incurred the expense. That could involve keeping credit card statements or being able to prove that you were in a particular place at a particular time.
Other Travel Related claims
As well as work-related travel some other travel claims may be available within the previously mentioned rules:
-When you attend a work related course or conference. If the conference is local, you can claiming mileage or transport costs. If the course is interstate (or overseas), you can claim airfares, accommodation and meals
-Visiting a residential investment property. You can claim for inspection trips to visit your rental property – but only until 30 June 2016. Under new law proposed in the last Federal Budget, such claims cannot be made for trips from 1 July 2017 onwards.
When it comes to making claims, you can always confirm with us when we are meeting with you over your tax.
-Visiting a tax agent. When you get your tax return done (or visit your agent for tax advice), the fee you pay is tax deductible and in addition, you can claim any related travel expenses.