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Edited version of private advice
Authorisation Number: 1012622254522
Ruling
Subject: WRE - travel
Question 1
Are you entitled to claim a deduction up to the Commissioner's reasonable travel amounts, without written evidence, where you include the travel allowance as assessable income and the expenses are actually incurred?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2012
Year ended 30 June 2013
The scheme commences on:
1 July 2011
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You travel all over Australia for your employment.
You receive an allowance from your employer for meal expenses that you incur while you're away from home.
You receive the allowance on the days you were actually travelling and during your forced break periods.
The allowance is calculated on a per day basis depending on where it is that you travel.
The allowance is shown on your PAYG Payment Summary as a taxable allowance.
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 (ITAA 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 95/18 states that an employee truck driver, who in the course of earning assessable income is required to sleep away from home, is considered to be travelling for work and may incur meal expenses as part of a work related travel expense. Division 900 of the ITAA 1997 outlines the substantiation rules for work related travel expenses.
Subdivision 900-B of the ITAA 1997 provides that the substantiation requirement to obtain written evidence does not apply to claims by employee taxpayers for expenses covered by a travel allowance if the amount of the claim for expenses incurred does not exceed the amount the Commissioner considers reasonable.
The amounts that the Commissioner considers reasonable in relation to claims made for travel allowance expenses for the 2011-12 income year is contained in Taxation Determination TD 2011/17. For employee truck drivers who are required to sleep away from home, the reasonable travel allowance amount (for a salary of $100,840 and below) is $87.00 per day.
The amounts that the Commissioner considers reasonable in relation to claims made for travel allowance expenses for the 2012-13 income year is contained in Taxation Determination TD 2012/17. For employee truck drivers who are required to sleep away from home, the reasonable travel allowance amount (for a salary of $104,870 and below) is $89.60 per day. Taxation Ruling TR 2004/6 provides guidance on the substantiation exception for reasonable travel and meal allowance expenses.
In your case, you received the travel allowance for the nights you were required to sleep away from home. This includes the periods you were on a forced break. We consider that you have received bona fide travel allowances.
If you have spent in excess of the reasonable allowance amount on meals, you are entitled to claim a deduction of the reasonable allowance amount, without substantiation, for each night that you were required to sleep away from home on work related purposes.
If you have spent less than the reasonable allowance on meals, you are entitled to claim a deduction for the amount that you actually spent on meals without substantiation.
If the deduction claimed is more than the reasonable amount, the whole claim must be substantiated, not just the excess over the reasonable amount.
Even where you rely on the above exception from substantiation, you may still be required to show the basis for determining the amount of your claim, that the expense was actually incurred and that the expense was work related. That is, you must have a reasonable basis for determining the amount you incurred.