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  • Travel agent employees – deductions you may be able to claim

    As a travel agent employee, here are some of the deductions you can and cannot claim.

    Travel expenses

    As a travel agent you may undertake travel as part of your work or travel to a range of destinations during your annual leave or educational leave. Travel while on leave is often referred to as educational or familiarisation travel.

    As a general rule:

    • Travel expenses on work travel are deductible and travel expenses on a holiday are not deductible.
    • Travel expenses associated with attending conferences, seminars and training courses are usually for work and deductible.
    • Travel expenses on educational, familiarisations and similar travel are usually for a holiday and not deductible. However, incidental expenses for reference material used in your work will be deductible.
    • Travel expenses in attending industry promotions will be deductible unless the promotion is classed as entertainment.

    Travel expenses that can be incurred by travel agents may include:

    • seminars, conferences and training courses
    • industry promotions
    • education, familiarisation and other similar travel
    • passport fees
    • travel insurance.

    Seminars, conferences and training courses

    Where it can be demonstrated that attendance at seminars, conferences and training courses is work related the expenses are deductible.

    Example 1

    Sylvia attended a one day course designed to update travel consultants on changes in electronic ticketing. Sylvia can claim a deduction for course fees and travel costs as it is a training course to update or improve her skills enabling her to work more efficiently in her current employment.

    Example 2

    Lionel attended a one day course on lifestyle management to help him with managing his work and personal life balance. This course is of a general nature and is not sufficiently related to Lionel’s work as a travel agent for his expenses to be deductible.

    End of example

    Industry promotions

    It is a common practice for travel agents to be invited to functions to view presentations of new tours and destinations. The cost of travel to attend the function would generally be allowable unless entertainment is provided at the function.

    Example 3

    Jana attended a promotional function put on by African Safari Tours to promote the company’s tours. No food or drinks were provided at the function. Jana is entitled to a deduction for her travel costs.

    However, if something more substantial than light refreshments is served, entertainment is being provided and the travel costs are not deductible.

    Example 4

    Jana attended a Gala Evening provided by her company to celebrate a successful year and present awards to their high achieving staff. The Gala included a three course meal, alcoholic drinks and a popular band for entertainment during the evening. Jana is not entitled to a deduction for her travel costs as this would be regarded as the provision of entertainment.

    End of example

    Educational, familiarisation and similar travel

    It is a common practice within the travel and tourism industry for sales staff to be provided with discounted holiday packages and trips which are often referred to as ‘educationals’ or ‘familiarisations’.

    Whilst the knowledge and experience gained on any overseas, interstate or local trip undertaken by a travel consultant could be of benefit to, and may be utilised in their employment, that alone is not sufficient to make the expense deductible. The 2008 decision in the Sanchez case shows that if you claim a deduction for some or all the expenses of the trip you need to be able to demonstrate that the trip was something more than a holiday.

    The examples below give some guidelines in this regard. However taking a photo journal, recording the trip in a diary and making some inspections of accommodation are unlikely to result in the travel being other than a private expense.

    Example 5

    Con accepts a discount holiday package to the USA so that he may recommend it from experience upon his return. Con takes the educational trip during his annual leave with his family. They go on sightseeing tours, shopping trips and tours to theme parks. Con will not be able to claim a deduction for his expenses as the trip is essentially a holiday and therefore a private expense.

    Example 6

    A wholesale travel company has developed a brand new tour. No brochures are currently available on the package so they will be relying solely on the retail sales consultants to sell the tour package in the first instance. TT Travel Pty Ltd has agreed to send one of their sales consultants to experience the tour first hand, take photographs with the company camera and provide a detailed report so the company can determine if they should market the tour, and if so, have material for that purpose. They have told sales consultant Jill that she has been selected. The wholesaler is paying for the flights, accommodation and any tour expenses, however Jill has to pay the taxes and for her meals. Jill’s trip has the necessary connection with her work as she is on work rather than on a holiday. She can claim a deduction for her meals and taxes.

    Example 7

    Candice went on a 14-day self-drive tour of Tasmania. Her employer provided her with some educational leave and requested that she attend a meeting in one town to obtain some information which would take up one day. Candice agreed to the meeting. She made her own travel arrangements. The trip is basically a holiday. However Candice can claim the travel expenses associated with the day she attended the meeting, that is, that night’s accommodation and meals for that day.

    Example 8

    Aiko went on a package tour of Canada during her annual leave and took many photos to remind her of her trip. She showed her holiday snaps to her co-workers upon her return. One photo was considered worth enlarging and displaying behind the counter. This alone is not sufficient to make the travel expenses deductible. However, Aiko is allowed a deduction for the cost of enlarging that photo and laminating it for display at work. If Aiko wanted to claim the cost of her other photos as a work-related expense she would have to demonstrate how she used them in her work – just having them in a photo album would not suffice.

    Example 9

    Alphonso applied for three months long service leave for the purpose of visiting Europe and seeing all those places he recommended to clients. His employer encouraged his holiday as it would provide him with some real life experience to discuss with clients. To show their support Alphonso was granted an extra week’s leave on full pay. In the absence of further information to demonstrate that the trip was something more than a holiday, Alphonso would not be allowed a deduction for his trip.

    End of example

    If you are uncertain about how this information applies to your personal situation, phone us on 13 28 61.

    Passport application and renewal fees

    The expenses associated with acquiring passports relate primarily to your personal right to travel to any overseas destination. So, passport expenses are generally private in nature and not deductible.

    Travel insurance

    Travel insurance policies invariably cover items that are generally private in nature such as illness, loss of baggage and theft or damage to belongings. So, travel insurance costs are generally private in nature and not deductible.

    See also:

    • TD 2015/14 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2015–16 income year?
    • TD 2016/13 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2016–17 income year?
    • TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses

    Work-related clothing expenses

    You can claim a deduction for the cost of buying, renting, repairing and cleaning certain work-related uniforms but not conventional shoes or clothing.

    Work-related daily travel expenses

    Home to work travel is only deductible in limited circumstances – for example, if you are engaged in itinerant work. Your home to work travel is not deductible, even if:

    • you do small tasks while travelling to and from work, such as collecting mail or banking
    • you travel outside normal employment hours
    • you are required to be on call
    • you live a long distance from your workplace, or
    • there is no public transport available.

    Union and professional association fees

    Union and professional association membership fees are deductible. However, worker entitlement fund contributions (for example, welfare fund contributions) and similar charges are generally not deductible.

    Entertainment expenses

    Entertainment expenses are generally not deductible. This includes the cost of business lunches, and attendance at sporting events, gala or social nights, concerts or other similar functions or events. This is the case even if business matters are discussed at the occasion.

    More information

    Although there is no specific taxation ruling for information travel agent employees, the principles in TR 95/9 Income tax: employee lawyers - allowances, reimbursements and work-related deductions are applicable across many professional forms of employment, and are relevant to travel agent employees.

    See also:

    If you are uncertain about how this information applies to your personal situation, phone us on 13 28 61.

      Last modified: 05 Oct 2016QC 19099