Claiming Travel Expenses As Part of Your Tax

As part of your job or the running of your business, you may be eligible to claim deductions for travel expenses incurred when travelling and staying away from home overnight for work purposes. Understanding the eligibility criteria and knowing which expenses you can claim can help you maximise your tax return.

At Attune Advisory, we specialise in tax – both personal and business – and can guide you on how to ensure you’re doing everything you can to improve your tax position.

With that in mind, we thought we’d cover what you need to know about claiming travel expenses as part of your tax lodgements.

Eligibility to Claim Travel Expenses

To claim travel expenses, you must meet specific conditions. You can claim a deduction for travel expenses—accommodation, meals, and incidental costs—if you travel and stay away from your home overnight in the course of performing your employment duties. Here are the key criteria:

• No Change to Regular Workplace: Your regular place of work remains unchanged.
• Short-Term Absence: You are away from home for a short period.
• Short-Term Accommodation: You stay in short-term accommodations such as hotels.

For instance, if you need to travel interstate for several days to meet clients, you qualify for these deductions. However, if your travel is due to personal circumstances, such as living far from work or choosing to stay near your workplace rather than commuting home, these expenses are considered private and are not deductible.

What Travel Expenses Can You Claim?

You can claim a variety of travel-related expenses:

• Accommodation: Costs of staying in hotels, motels, serviced apartments, or properties booked through digital platforms.
• Meals: Expenses for food and drinks.
• Incidental Expenses: Minor but necessary costs related to your work travel, such as parking fees, bus tickets, or charges for using the phone or internet for work purposes at your overnight accommodation.
• Transport: Costs of flights or other transport methods to and from your work-related travel destination.

It’s important to note that if your travel includes both work and private purposes, you can only claim the portion related to work. For instance, if you extend a business trip to include a holiday, you must apportion the expenses accordingly.

Keeping Records

To claim these deductions, maintaining accurate records is crucial. Keep all receipts or other written evidence of your travel expenses. You will need to submit these when claiming your deduction under “Work-related travel expenses” in your tax return.

In rare cases, you might be able to claim expenses for accommodation you rent or buy for temporary work-related travel. These expenses must be proportionate to the cost of suitable commercial accommodation for the period and must not arise from personal choices, such as maintaining a separate residence. We can guide you through the specific rules to ensure compliance when we speak.

Travel Expenses You Cannot Claim

Certain travel expenses are not deductible:

• Employer-Provided Expenses: If your employer provides or reimburses your accommodation or meals.
• Personal Circumstances: If you live far from your work due to personal choices or choose to stay near your workplace instead of commuting home.
• Living at Work Location: If you live at the work location, incurring accommodation, meals, or incidental expenses.

If you are living at a location where you work, such as in a unit or house, and your regular place of work changes, these expenses are not deductible as they are considered private.

Apportioning Travel Expenses

When travel is for both work and personal purposes, you must apportion the expenses. For example:

• Adding a Holiday: If you add a holiday to a work trip.
• Family Accompaniment: If family or friends join you on a work trip.
• Holiday Activities: If you engage in work activities while on a personal holiday.

If the personal part of your travel is incidental, such as a brief holiday after a work trip, you may not need to apportion your costs. However, clear documentation and careful record-keeping are essential to substantiate your claims.

Navigating travel expense claims need not be confusing but it’s important it’s done right. And, doing it correctly can allow you to maximise your deductions and ensure compliance. For personalised advice and expertise, contact us the Attune team on 1300 866 113 – we are here to help you make the most of your tax position while ensuring you’re adhering to all necessary regulations.

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