Edited version of private advice

Authorisation Number: 1052133436552

Date of advice: 26 June 2023

Ruling

Subject: Work related travel expenses

Question

Are you entitled claim a deduction for the difference in price between an economy airline ticket and a more expensive airline ticket?

Answer

Yes, you are entitled to claim a deduction under section 8-1 of the Income Tax Assessment Act 1997 for the additional expense you incur to upgrade your airline ticket from economy to a more expensive airline ticket.

The cost of the upgrade component is deductible providing:

•         you receive no reimbursement (for which a deduction is not allowed)

•         it relates directly to income generation, that is, work-related purposes only (for example, no holidaying) and

•         you have a receipt, invoice, or other records to substantiate the expense.

This private ruling applies for the following period:

30 June 20XX

30 June 20XX

30 June 20XX

30 June 20XX

The scheme commenced on:

1 August 20XX

Relevant facts and circumstances

As part of your employment obligations, you must spend time with your teams that are based in the overseas offices. You do quite a bit of work through online but some work is still needed to be done in person. As a team leader it is important for you to spend time with your team members in person and continue to work through people and learning issues.

As a result you need to travel every few months to spend time with the team working on various objectives as relating to your role as team leader. The travel from Australia to the overseas destinations is approx. XX hours. Your employer only pays for an economy seat. These are long flights. Most of these travels involves spending several days each in overseas destination.

By the time you reach the destination you are very tired and you find it very difficult to sleep. You are tall and this makes it a lot harder to try and stretch out. You would like to try to purchase the next available upgrade to support your health. All the flights/travel is 100% work related.

Your employer does not have a policy of providing more comfortable seating options on these long flights. The travel on average from door to door is greater than XX hours from one location to the next.

The only party involved for the extra cost of the airline ticket is yourself.

The employer requests you to undertake overseas travel. The travel is an essential part of your role as your work involves managing an overseas region.

All food and accommodation expenses are paid by your employer.

You do not take any leave during the travel period unless sick at the destination.

You do not have any leisure during this travel.

You travel alone on these trips.

You view the additional expense for these long flights as health related.

The additional expense is not reimbursed by your employer.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1