Work Related Travel Expenses

Deduction for travel expenses can be equally apply to a business taxpayer and an employee deriving salary and wage income that there is a sufficient connection between travel and the derivation of income by the taxpayer. Hence to claim a deduction for travel expenses, you must be able to demonstrate that the expenses are linked to the derivation of income you obtained. In section D2 of the tax return form extends travel expenses to accommodation, meals and other incidental costs that associate with business/work travel.

Car Expenses

Either you own or lease/hire purchase the car are allowed to claim if the car is used for work expense. Expenses for vehicles other than a normal car are available to be claimed, would include:

  • A panel van or utility truck designed to carry a load of one tonne or more;
  • Any other road vehicle designed to carry a load of one tonne or more, or carrying nine or more passengers
  • Motor Cycle


Domestic and Overseas Travel- Key Principles

Travel expenses that associate with accommodation and food can be deductible. However, they must generally involve an overnight stay for business purposes. Hence, the taxpayer must demonstrate that he/she are on business travel rather than living away from home.

In the matter, the cost of business travel is deductible as follows:

  • Employee- Paid to undertake a business travel that is directly related to the income activity;
  • Sole Trader/Business person- An action that is necessarily incurred in carrying the business to produce income.


Travelling on-work

In consideration, travelling on-work is where an employee travels away from home (overnight) in order to discharge their employment duties. To distinguish whether an employee is travelling on-work, there are factors that indicate whether the employee is travelling on-work:

  • Employee’s existing work location continues to be the primary place of work;
  • Employee has maintained their family home when travelling;
  • Employee does not take ‘residential belongings’ (e.g. golf clubs to be used for private use).

For the course of travelling:

  • Employee is not accompanied by family members;
  • Employee uses temporary style accommodation when travelling (e.g. Hotel, motel);
  • Carrying out the normal duties of their employment, excluding duties that transfer them to specific assignments
  • Duration of the travel is short term
  • Employee’s travel itinerant is intended for the specific nature

Living away from home

In circumstances, an employee who is living away from home for work purposes where the employee has taken up temporary residence. For the factor to exist, they must carry out the work duties at a new (temporary) work location. For some of these factors that indicate whether you are working away from home, are:

  • Employee establishing a new (Temporary) work location that is considered to be the employee’s primary place of employment for a specific time frame;
  • Employee has moved to a closer location to a new (Temporary) work location;
  • Employee’s transfer is for a limited period of time;
  • If you were not an employee having to move for work purposes, the employee would have continued to live at their original place of residence;
  • Employee clearly intends to return home on termination of work at the temporary location;
  • Accompanied by family members; and
  • Uses a longer-term accommodation when away from home (e.g. the employee takes out a lease on the premises).


Apportionment and Travels- Key Principles

Often the taxpayers have to apportion their claim for travel expenses where the travel has a private or work related purpose. Apportioning travel expenses, the courts of often seen to take an objective look at the intention for the purpose of incurring travel expenses as a relevant factor in determining whether apportionment is a factor in the travel.


Travel Allowance for Truck Drivers

Entitled to claim for meal expenses incurred without having to verify where the conditions have been satisfied:

  • Employee of the truck is paid a travel allowance to cover the costs of meals;
  • Employee of the truck driver is required to sleep away from their home overnight; and
  • The amount does not exceed the Commissioner’s reasonable doubts.

The Principle that needs to be satisfied before deducting a business travel

  • Qualify as a deduction under the Act;
  • Needs to substantiate the expense by getting written evidence and retaining evidence (e.g. Receipts, Statements) for five years;
  • For the employee or taxpayer has to keep a travel record (diary) if the travel involves them being away from home for more than six nights in a row.
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