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Travel Expenses – What Can I Claim?

Article By Adam Hurwood | | General News
If you are required to travel as a business owner or employee in the course of producing assessable income, you may deduct most travel expenses.  For example, you may deduct the costs of operating or renting a motor vehicle, purchasing aeroplane, bus or train tickets, and paying taxi fares. As well as this, you may deduct the costs of commercial accommodation and meals. Generally you are unable to deduct the costs of travel between home and work.  If you are an employee, you may claim these items if your employer does not provide a travel allowance.

To ensure the expenditure is allowable as a deduction, you must satisfy one or both of these substantiation conditions:

Produce written documentation from the providers of goods and services that includes dates and cost, such as receipts for tickets, hotel rooms and petrol. If you travel for business purposes, you need this documentation only if the travel involved at least one night away from home.

Expenses incurred as part of travel in the course of earning non-salary or wage income not involving an overnight absence are subject to the general taxation substantiation requirements.

Keep a travel diary if you are away from home for six or more consecutive nights. The diary must show the nature of each business activity during the trip as well as the date, time and location of the activities. The requirements for the production of such records are similar to those applicable to car expenses.

International Travel

Travel abroad that is connected with producing assessable income can also be deducted by both business and individual taxpayers.

If you are a business taxpayer, you may deduct:

  • The cost of travelling abroad to hire an employee; and
  • The expenses involved in an international trip to seek out new customers because the costs have a close relationship to the expected new business income.On the other hand, the costs of travel abroad to hire a business partner or to expand a business are generally not deductible.

    Professionals and academics may deduct the costs of trips overseas to attend conferences or other activities related to their professional interests. Examples of such deductions that have been allowed include:

  • A history teacher’s trip to historical sites and museums; and
  • An outdoor education teacher’s camping and wildlife trip

The cost of travel insurance, visas and passport fees are not deductible.

If you undertake overnight travel for business or work purposes and you require more personalised advice applicable to your specific situation, please contact your Altitude Accountant