Travelling for work: A chance for a tax-deductible holiday?

Travelling for work: A chance for a tax-deductible holiday?

Unsure what you can and can't claim when you travel for work? Michelle Maynard, Partner, has put together a summary of what you need to be aware of when it comes to mixing a business trip with a few days to relax.

If you’re traveling for work over the Christmas and New Year season and adding on a few extra days to relax, there’s a few things you need to be aware if you think you can claim the entire trip as a business expense.
According to the ATO, you must declare any travel allowance you receive from your employer as income in your tax return. There are a few exceptions to this rule, and you don’t have to declare the allowance if:
  • The travel allowance is not shown on your payment summary
  • The travel allowance does not exceed the Commissioner of Taxation’s reasonable allowance amount
You spent the whole allowance on deductible accommodation costs (and meal and incidental expenses, if applicable)
If you do not declare your allowance as income, you cannot deduct your accommodation costs or other incidental expenses, even if they are more than your allowance.
If your travel is 100% for work purposes, then your entire expenditure would be deductible (subject to the above).
But what happens when you combine business with leisure and add those couple of extra days onto the end of your trip after your work is complete? Now it gets a little bit more complicated, since you are required to apportion your expenses. Here are a couple of examples to explain the varying situations.
Michelle Maynard, Partner at Carbon Accounting, flies from Perth to Hawaii for a seven-day work-related conference on finance and accounting. One of those seven days involves a sight-seeing boat cruise around the island. Since the main purpose of the conference is related to Michelle’s line of work, the total cost of the conference, including air fares, accommodation and meals, is allowable. The private pursuits, such as the boat cruise, is purely incidental to the main purpose of the trip.
Jamie Davison, Co-Founder at Carbon, has a three-day conference to attend in Brisbane, then he is flying straight from there to Cairns for a family holiday. The family holiday in Cairns is purely private in nature, so Jamie can only claim on his flights from Perth to Brisbane, and accommodation in Brisbane. No costs encountered in Cairns may be claimed.
Our advice to you is to keep a detailed record of your expenditure as well as your activities throughout your trip. If you’re unsure of what you can and can’t claim, chat to our accountants and they’ll assist when it comes to lodging your tax return.

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