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Ruling

Subject: Reasonable travel amounts

Question

Can you claim up to the Commissioner's reasonable allowance amounts for expenses incurred when travelling away from home on work without substantiation?

Answer

No

This ruling applies for the following period

Year ended 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts

You are employed in a particular profession

During the year you were required to stay overnight for a number of days.

You received a travel allowance of which amounts to approximately $X a day.

You have incurred expenses in relation to this travel, for meals, accommodation and incidentals.

You have no record of your actual expenditure as you have lost all your receipts for your travel expenses.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Income Tax Assessment Act 1997 Subdivision 900-B.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital or private or domestic nature.

Taxation Ruling TR 2004/6 examines situations where you may be entitled to an exemption from substantiating travel expenses, where the expense is not more than the reasonable amounts published by the Tax Office.

Paragraph 18 of TR 2004/6 states that for domestic travel allowance expenses to be considered for exception from substantiation, you must be paid a bona fide travel allowance. The allowance must be paid to cover work-related travel expenses incurred for travel away from your ordinary residence, undertaken in the course of performing duties as an employee and which involves sleep away from home.

Further at paragraph 61 of TR 2004/6 the ruling provides an example where a token amount of allowance, for instance $5 per day to cover meals for travel that involves sleeping away from home, would not be considered a payment that is expected to cover the purchase of three meals per day while travelling for work. The payment would not be considered a travel allowance for the purposes of the exception from substantiation.

In your case, you wish to claim the Commissioner's reasonable amounts for your travel expenses. You received a travel allowance of which amounts to approximately $X a day. In comparison to the Commissioner's reasonable amounts the payment is clearly nominal. It is also not reasonable to expect this amount would cover the purchase of your meals, accommodation and incidentals each day.

Therefore, it is considered that the allowance you received was not a bona fide travel allowance. Consequently you cannot claim the Commissioner's reasonable allowance amounts for travel away from home. You must substantiate any travel expenses you wish to claim.