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  • Travel allowance record keeping exceptions

    If your travel expense claims are less than the reasonable amounts, you may be able to rely on the exception from keeping written evidence and travel records.

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    Relying on the travel allowance exception

    There are several different travel allowance exceptions you may be able to rely on. To rely on one of the exceptions listed below, you must satisfy certain requirements for:

    If you can't rely on one of the travel allowance record keeping exceptions, you will need to Keep travel expense records.

    Domestic travel

    You will be able to rely on the exception from keeping written evidence of your accommodation, food and drink and incidental expenses and travel records if:

    Exception for domestic travel with travel allowance and claim that doesn't exceed the reasonable amounts

    Travel period (days)

    Written
    Evidence

    Travel
    Records

    Less than 6 nights in a row

    No

    No

    6 or more nights in a row

    No

    No

    Exception for domestic travel with travel allowance and claim that exceeds the reasonable amounts

    Travel period (days)

    Written
    Evidence

    Travel
    Records

    Less than 6 nights in a row

    Yes – for the whole claim

    No

    6 or more nights in a row

    Yes – for the whole claim

    Yes

     

    Example: meal by meal approach to reasonable amounts

    Bruce's employer requires him to travel for work overnight. He leaves at 3.00pm and returns home at 7.00pm the following day. Bruce's employer pays him a travel allowance for meals and incidentals for the period of his travel. This is shown on Bruce's income statement.

    Bruce's employer pays for the accommodation directly. To work out if he can rely on the travel allowance record keeping exception, Bruce must separately calculate his expenses. Bruce separately calculates the following:

    • his dinner on day one
    • his expenses for breakfast, lunch and dinner on day 2
    • his incidental expenses for day one and day 2.

    As long as Bruce's claim for deduction for each meal and day of incidental expenses is not more than the reasonable amount for each meal and daily incidental amount, Bruce is not required to keep receipts.

    End of example

    Overseas travel

    The exception from keeping written evidence and travel records for overseas travel works in the same way as the exception for domestic travel except:

    • you must keep written evidence for all your accommodation expenses
    • you must keep travel records if you receive a travel allowance to cover your expenses and you are away from your home for 6 or more nights in a row.

    Overseas travel for airline crew

    If you are an airline crew member on an overseas flight, you can claim a deduction for your travel allowance expenses without keeping travel records, such as a travel diary, if:

    • your travel allowance covers your travel as a crew member on an aircraft
    • your travel is principally outside Australia
    • your deduction for expenses your travel allowance covers don't exceed the amount of the allowance you receive.

    This exception only applies to keeping travel records.

    To rely on the exception from keeping written evidence for your food and drink and incidental expenses:

    • you must incur deductible travel allowance expenses
    • you must receive a travel allowance from your employer
    • your travel allowance expenses must be reasonable.

    You must keep written evidence for all of your accommodation expenses.

    Exception for overseas travel - airline crew with travel allowance and claim that doesn't exceed the reasonable amounts

    Travel period (days)

    Written
    Evidence

    Travel
    Records

    Less than 6 nights in a row

    Yes – for accommodation

    No – for meals and incidentals

    No

    6 or more nights in a row

    Yes – for accommodation

    No – for meals and incidentals

    Yes, except crew members claiming less than their travel allowance

    Exception for overseas travel - airline crew with travel allowance and claim that exceeds the reasonable amounts

    Travel period (days)

    Written
    Evidence

    Travel
    Records

    Less than 6 nights in a row

    Yes – for the whole claim

    No

    6 or more nights in a row

    Yes – for the whole claim

    Yes, except crew members claiming less than their travel allowance

     

    Example: travel records and written evidence for international airline crew

    Orla works for an airline as a captain and she flies long haul international routes to the United States of America. She receives a travel allowance for meals when she stays overnight.

    The amount of Orla's allowance is:

    • $25 for breakfast
    • $56 for lunch
    • $67 for dinner.

    Orla’s regular itinerary is as follows:

    • Days 1 and 2: flies from Sydney to Los Angeles on an overnight flight and spends an additional night in Los Angeles to rest
    • Days 3 and 4: flies from Los Angeles to New York and stays 2 nights there to rest
    • Days 5 and 6: flies from New York to Los Angeles and spends 2 nights there to rest, and
    • Day 7: flies back to Sydney.

    All up, Orla is away from home for 6 nights.

    While in Los Angeles Orla spends:

    • $22 on breakfast
    • $18 on lunch
    • $46 on dinner.

    While in New York Orla spends:

    • $23 on breakfast
    • $25 on lunch
    • $40 on dinner.

    Even though Orla is away from her home for 6 nights in a row, she doesn't need to keep travel records because the amounts she spends on meals is less than the travel allowance her employer pays her.

    Her meal expenses are also less than the reasonable amounts for the United States of America so Orla does not need to keep written evidence for her meal expenses because she can also rely on the travel allowance record keeping exception. .

    However, Orla can only claim the amount she incurs on meals and she still needs to show how she works out the amount of her claim.

    End of example

    For more information, see TD 2021/6 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2021-22 income year?

    Records to keep if the exception applies

    If you don't receive an allowance from your employer, you need to keep receipts and a travel diary to claim a deduction. This is because the travel allowance record keeping exceptions don't apply to you.

    Even if you don't claim more than the reasonable amounts (and an exception applies), we may still check your tax return and ask you to show:

    • how you spent the money in the course of performing your work duties – for example, in travelling away from home overnight on a work trip
    • how you worked out your claim – for example, kept a diary showing the times you were away and how many meals you ate and where
    • you spent the money yourself and you were not reimbursed – for example, credit card statement or other banking records.
    • you correctly declared your allowance as income in your tax return.

    Example: relying on exception for domestic travel

    Zoran works in Melbourne. His employer requires him to travel to the office in Sydney for a week to meet with a number of clients. Zoran leaves early on Monday morning and returns home on Friday evening.

    For the 5 days he is in Sydney, Zoran's employer pays him a travel allowance of $1,030. He receives the allowance to cover:

    • accommodation of $170 per night × 4 nights = $680
    • food and drink of $70 per day × 5 days = $350

    Based on his records, Zoran calculates that he spent $700 on his hotel accommodation and $400 on food and drinks over the 5 days. Zoran determines that the amount he incurred each night on accommodation and the amount he incurred on each meal were less than the reasonable amount set by the ATO.

    As Zoran is away from home for less than 6 nights in a row, he does not have to keep travel records. Zoran isn't required to keep receipts for his accommodation, food and drink expenses for this trip to Sydney either because he meets the requirements for relying on the travel allowance record keeping exception for domestic travel.

    However, Zoran keeps records as evidence that he was travelling for work. He keeps also his credit card statements or other records to show he spent the amount he is claiming as a deduction ($700 + $400 = $1,100). He also keeps a record to show he declared the $1,030 allowance in his tax return.

    Zoran must keep all receipts for any incidental expenses he has when in Sydney. As he didn't receive an allowance for incidental expenses, he can't rely on a travel allowance record keeping exception for incidental expenses.

    End of example

    Travel allowances and exceptions

    Your employer may pay you a travel allowance to cover travel expenses you incur when you travel away from home to perform your employment duties.

    You can't automatically claim a deduction just because you receive a travel allowance. Where you do receive an allowance, you might not have to keep receipts and a diary (as applicable).

    Find out if your circumstances mean you can rely on the travel allowance record keeping exception.

    Example: payment not a travel allowance for travel expenses

    Mel receives $30 a day from her employer when she is required to travel. The employer does not pay for any travel expenses directly. This means Mel has to organise and pay for everything herself, including meals and accommodation.

    Mel keeps a record of her travel expenses when travelling. Even though the amount she claims in her tax return is less than the reasonable amounts, she must keep all of her receipts. This is because the amount she receives from her employer is not considered to be a travel allowance – it will not cover the costs Mel will incur when she travels.

    End of example
    Last modified: 21 Mar 2022QC 56003