Travel expenses now clearer

The Australian Tax Office (ATO) has made its stance on travel expenses clearer in a recent draft tax ruling to help determine whether an employee can deduct certain travel expenses.

Released on 28 June 2017, the ruling will replace previous guidance that was more than 30 years old. The draft ruling coincides with recent high-profile court decisions around travel and transport deductions.

Some of the main issues determined include:

Deductible travel Non-Deductible travel
Special demands travel (i.e. travel to remote work locations) Ordinary home-to-work travel
Requirement to move continuously between changing work locations Relocation travel
Requirement to work away from home for extended period (e.g. temporary alternative work locations)  
Travel between co-existing work locations  

Source: Technical Update: BDO welcomes draft ruling on travel expenses deductibility but recommends clarification in submission


The ruling has raised questions surrounding what determines a ‘remote’ location when claiming for expenses incurred.

Employers need to consider how the ruling will impact their FBT treatment for the year ending 31 March 2018.

Full details of the draft ruling can be found here. If you would like further clarification regarding any of the proposed rulings call us on 03 5443 0344.