• Commissioner announces review of MP allowances ruling

    With a number of media reports circulating in relation to travel allowances and work-related expenses, the ATO is urging all taxpayers to understand their obligations and check their claims.

    Tax Commissioner Chris Jordan said there were no special rules for Members of Parliament.

    “The rules are the same for every taxpayer, regardless of their occupation,” the Commissioner said. 

    “Any taxpayer who has had to travel overnight for work is entitled to deduct the costs of meals and accommodation under our tax laws.

    "However, given that there are clear misunderstandings of how the ruling is applied, we will undertake to review the 1999 ruling to give greater clarity for all taxpayers on the treatment of allowances they may receive from their employer to cover the costs of work related travel."

    Answers to common questions

    Are there special tax rules for Members of Parliament regarding travel allowances and other deductions?

    No. They have the same entitlements and responsibilities as other taxpayers. The returns of all taxpayers, including Members of Parliament, are scrutinised.

    Can you claim a deduction for travel expenses if you have received an allowance?

    Any taxpayer, including a Member of Parliament, should not be claiming deductions for travel expenses unless they have declared the allowance as income in their tax returns. 

    This is mainly relevant when a taxpayer incurs expenses greater than the allowance. Provided that the expenses can be substantiated, they can declare the allowance as income and claim the relevant deductions.

    What is the ATO’s ruling regarding travel allowances and deductions for Members of Parliament?

    All taxpayers required to travel overnight away from home for work may be entitled to deduct the costs of meals and accommodation under the general income tax deduction rules.

    We issued a public ruling in 1999 following wide consultation. This ruling specifically deals with how we assess travel allowances and deductions for Members of Parliament, and is consistent with how the Courts have applied the general laws applying to all taxpayers regarding the deductibility of work-related travel expenses.

    Last modified: 23 May 2016QC 49057