Have you ever wondered whether you can claim tax deductions for your travel expenses for a recent conference or seminar you attended?
What about the cost of meals you consumed, flights you took and places you stayed at as a result of attending this conference?
In this article we discuss the types of tax deductions you can declare when you fill out your tax return.
Cost of Meals, Flights and Accommodation
If you are travelling, you may be able to deduct the costs of meals, flights and accommodation if the following conditions apply:
- You declare any travel allowance you receive from your employer as income in your tax return;
- You did not incur the expenses because of a choice you had made to maintain residence in a different location to that of your place of employment;
- You are working away from home for a short period. You are not living away from home;
- As part as your employment duties there is a requirement to travel away from home;
- You maintain a permanent home at a location away from the work location that you are travelling to; and
- You have paid for travelling costs and have not been reimbursed for them.
Meal expenses are generally deductible if you have incurred the expense as a result of attending conferences or seminars which are considered to be outside of your immediate living area or where there is a requirement to sleep away from home.
Typical travel expenses include airfares, accommodation, transportation and some incidental costs.
Each year there is an ATO tax ruling which sets out the maximum daily amount an employee in receipt of a bona fide travel allowance can claim without substantiation.
Should you wish to claim more than the maximum daily amount as defined in the ATO tax ruling, you will need to ensure you have kept tax invoices to substantiate the entire claim.
What if I mix a business conference and a private holiday?
Have you ever attended a business conference for a few days, then decided to stay a bit longer and have a holiday? Did your partner or spouse accompany you on this trip? Further rules may apply to limit or increase the amount of tax deduction you may be able to claim.
Trips partly for business and partly for private purposes
Depending on what the main purpose of your trip was, the transport expenditure may be entirely deductible.
If the main purpose was to gain or produce assessable income (e.g. to attend a work-related conference), then generally the entirety of your own transport expenses incurred in connection with travelling to the venue will be deductible.
For example, if you were attending a three day work-related conference in London, but decided to spend two days afterwards sightseeing, the airfares would usually be entirely deductible where the main purpose of the trip was to attend the conference. However, some of the accommodation and meal costs may be non-deductible to the extent they were in relation to private purposes.
Travel expenses incurred in relation to your partner or spouse are generally not deductible, however special rules may apply depending on your individual circumstances.
If you have been accompanied by your partner or spouse, the Commissioner has accepted the following methods as ways to identify non-deductible costs:
- 50/50 apportionment; or
- Marginal cost (i.e. the difference in single v double room rates); or
- A mixture of these two approaches.
For example, a full deduction for hotel room accommodation would usually be allowable where your partner stays with you, on the basis that the same cost would have been incurred for the accommodation irrespective of whether your partner joined you or not.
In comparison, your partner’s airfares may not be deductible because they would likely not have been incurred in connection with his/her own derivation of income and they would not have otherwise been incurred if you had have gone alone.
Substantiation of Overseas and Domestic Travel
Special substantiation rules apply to both overseas and domestic travel. These types of expenses may not be deductible unless the following conditions have been met:
- Written evidence must be kept by you in relation to the travel expenses irrespective of length of absence from your home. In the instance of a business travel expense this only needs to be kept if the travel was for at least one night away from home; and
- Travel records such as diaries must be kept in the instance where the travel was for six or more consecutive days away from home. Diaries should refer to the nature of the activity, the day and time the activity began, duration of the activity and location of where the activity took place.
Need further assistance in relation to what you can claim? Feel free to contact William Buck.