As many worldly people know, travelling is expensive. Speaking from personal experience, a long weekend away can sometimes suddenly turn into an endless accumulation of expenses. All things considered, I have no doubt that the vast majority of individuals have pondered the possibility of claiming these expenses on their tax return… but then later speculated over its legality.
Please consider this your simplified ‘tax travel guide’ for what expenses you can and can’t claim while travelling for work, business or self-education. The expenses claimed for travel fall into four main categories. These being:
Generally speaking, the largest singular expense for individuals while travelling is the cost of transport. This is of course due to the expensive nature of flights. To claim the cost of flights on your tax return, you must first consider the purpose of your travel. Should it be 100% work related, then you should expect to claim 100% of your flight. If you suddenly come to the realisation that part of your travel is for private purposes, then you must consider whether this private portion is ‘incidental’ for the purpose of the trip. Should the private portion be incidental to the overall trip, then you should still expect to claim 100% of your flights. This means that you can still enjoy yourself on a work-related holiday without worrying about the Tax Office chasing after you!
That being said, an individual cannot simply book a skiing trip to America, and then in an attempt to claim the expense on their tax, spend half a day at a work-related conference in the mountains. The personal experience must be incidental to your trip!
Going down the list of expenses accommodation, meals and incidentals should be treated differently. You must take these expenses case by case and time by time to determine their deductibility. The general rule here is that, on the days you’re working, you can claim all these expenses. On the days you are not working, you cannot claim these expenses.
For example, you’re paying for a hotel so you can attend a conference. The conference lasts one day but you decide to stay an extra day as it is by the beach and you wouldn’t mind checking it out. In this circumstance, for the day you attend the conference, your accommodation, meals and incidentals will be tax deductible, for the day you are at the beach, these expenses will hold no tax benefit.
So, say you would like to claim some expenses, what evidence would you need to keep?
Well, as you would expect, receipts are always a must. This is the best way for us tax agents to ensure that the expense was actually incurred. In addition, should you be travelling overseas for more than six nights, it is required for an individual to maintain a travel diary. This diary must have accurate records of:
Now you have all the basic resources you need to claim your travel expenses. All you need to do now is remember to stay safe and enjoy your trip!
Written for you by Chris Davies
Client Portal
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