How to claim as much a possible at tax time when you travel for work

  • How to claim as much a possible at tax time when you travel for work

    As a corporate traveller, did you know that some of the additional expenses that you incur throughout your trips may be tax deductible? However, you need to make sure you are claiming the right things!

    When completing your tax return, you’re entitled to claim deductions for some expenses, most of which are directly related to earning your income.

    Travel Expenses – What you can claim

    • travel expenses you incurred for meals, accommodation and incidentals while 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 (such as fuel costs) when using a borrowed car or other vehicle for work purposes
    • air, bus, train, tram and taxi fares
    • bridge and road tolls
    • car parking and car-hire fees.

    What you can’t claim

    • You can’t claim a deduction for any fines you receive, such as speeding or parking infringements.
    • You can’t claim a deduction for those travel expenses which are reimbursed to you.

    Overtime Meals

    You can claim a deduction for overtime meals without getting written evidence, if all the following apply, you:

    • get paid and overtime meal allowance under an industrial instrument (such as an award)
    • buy food and drink on overtime
    • only claim up to the reasonable allowance expenses amount.

    However, you can still only claim the amount you have actually spent.

    If you claim more than the reasonable allowance expense amount, you need to keep written evidence of all of your expenses on your food and drink, not just the excess.

    Using your car for work

    You can claim vehicle and other travel expenses you incur in the course of performing your work duties, but generally you can’t claim for normal trips between home and work – this is considered private travel.

    You need to keep records of your travel expenses.

    What you can claim

    You can claim the cost of travelling:

    • directly between two separate workplaces – for example, when you have a second job (if one of these places isn’t your home)
    • from your normal workplace to an alternative workplace that is not a regular workplace (for example, a client’s premises) while still on duty, and back to your normal workplace or directly home
    • if your home was a base of employment – you’re required to start your work at home then travel to a workplace to continue your work for the same employer
    • if you had shifting places of employment – you regularly work at more than one site each day before returning home
    • from your home to an alternative workplace that is not a regular workplace for work purposes, and then to your normal workplace or directly home. This doesn’t apply where the alternative workplace has become a regular workplace
    • if you need to carry bulky tools or equipment that your employer requires you to use for work which you can’t leave at your workplace – for example, an extension ladder or a cello.

    What you can’t claim

    You can’t claim the cost of driving your car between work and home just because:

    • you do minor work-related tasks – for example, picking up the mail on the way to work or home
    • you have to drive between your home and your workplace more than once a day
    • you are on call – for example, you are on stand-by duty and your employer contacts you at home to come into work
    • there is no public transport near where you work
    • you work outside normal business hours – for example, shift work or overtime
    • your home was a place where you ran your own business and you travelled directly to a place of work where you worked for somebody else
    • you do some work at home.

    Car Expenses

    If you use your own car in performing your work-related duties (including a car you lease or hire), you may be able to claim a deduction for car expenses.

    If the travel was partly private, you can claim only the work-related portion.

    This information relates to car expenses only. A car is defined as a motor vehicle (excluding motor cycles and similar vehicles) designed to carry a load less than one tonne and fewer than nine passengers. Many four-wheel drive vehicles are included in this definition.

    Calculating your deductions
    Cents per kilometre method

    Under the cents per kilometre method:

    • A single rate is used. Your claim is based on 68 cents per kilometre from 1 July 2018 (or 66 cents per kilometre for the 2017–18 income year).
    • You can claim a maximum of 5,000 business kilometres per car.
    • You may need to provide written evidence to show how you worked out your business kilometres (for example, by producing diary records of work-related trips).
    • Where you and another joint owner use the car for separate income-producing purposes, you can each claim up to a maximum of 5,000 business kilometres.

    You can choose one of the following two methods to calculate deductions for car expenses:

    Logbook method

    Under the logbook method:

    • Your claim is based on the business-use percentage of the expenses for the car.
    • Expenses include running costs and decline in value but not capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs.
    • To work out your business-use percentage, you need a logbook and the odometer readings for the logbook period. The logbook period is a minimum continuous period of 12 weeks.
    • You can claim fuel and oil costs based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year.
    • You need written evidence for all other expenses for the car.

    Do you need to keep a travel diary?

    If you travel away from home for six or more nights in a row, you need to keep a travel diary except in the following circumstances:

    • You receive a travel allowance for your travel, you are travelling in Australia, and the amount you are claiming is up to our reasonable travel allowance expense amount.
    • You are a crew member on an international flight, you receive a travel allowance for your travel, your travel is principally overseas, and your claim is not more than the amount of allowance you receive.

    You don’t need to keep a travel diary if your travel away from home is for less than six nights in a row.

    It can still be helpful to keep details of your travel, even if you aren’t required to keep a travel diary

    Source: https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Vehicle-and-travel-expenses/

    Dated 11 June 2019

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