| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051463163990
Date of advice: 12 December 2018
Ruling
Subject: Travel expenses for your business
Question 1
Are you entitled to claim a deduction for the costs incurred for transporting your vehicle from State A to State B when travelling for a business contract under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
In this case, you have incurred an expense in order to transport your vehicle in order to use it to run your medical business. Therefore, the expense is considered to be connected to the production of your business income and has the essential character of a business expense.
As per the second limb of Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) your travel expenses are considered necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. Further information about business travel expenses can be found by searching 'QC 44448' on ato.gov.au
Question 2
Are you entitled to claim a deduction for meal expenses incurred when travelling for a business contract under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
In your case, the provision of medical services is your main business activity and how you produce assessable income. It requires you to be away from home in order to generate income in the business.
During those times, the expense that you incur for meals is connected to the work in which you are engaged. Therefore, the expenses are considered to be connected to the production of your business income and have the essential character of a business expense.
As per the second limb of Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) your travel expenses are considered necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. Further information about business travel expenses can be found by searching 'QC 44448' on ato.gov.au
Question 3
Are you entitled to claim a deduction for costs associated with your accommodation (water, gas, electricity and internet) when travelling for a business contract under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
In this case, you have incurred expenses for your accommodation for water, gas, electricity and internet to allow you to travel for your medical business. Therefore, the expenses are considered to be connected to the production of your business income and have the essential character of a business expense.
As per the second limb of Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) your travel expenses are considered necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. Further information about business travel expenses can be found by searching 'QC 44448' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You work as a sole trader as a locum in the medical field.
You primarily work in State A.
For the current financial year, you anticipate that you will generate more income from your business from income generated from employment.
You were employed from July 2018 until August 2019 in State A.
You will be working as a locum in State B from August 2018 until December 2018.
You have a contract for employment as an employee from DDMMYY until 30 June 201X in State A.
In order to source your locum positions for your business, you use a mix of personal contacts/networks as well as a locum agency to source positions.
In relation to your work as a locum in State B, you sourced this position through an email advertisement from an agency.
Your principal place of residence will remain in State A for the duration of your work in State B.
You have secured short term rental property to reside in for the period in State B.
You intend to take your motor vehicle to State B to allow you to conduct your locum business as it is cheaper to take the car with you than rent a vehicle for the duration.
You have entered into an Independent Contractor Agreement with an agency for your locum work in State B.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1