Sometimes, as part of your job, you may be required to travel for work, but how much can you claim for business trips?
Whether you are visiting interstate clients or travelling for training sessions, trade shows and work conferences, you are entitled to claim back some of your expenses on tax. Fortunately, the tax guidelines are fairly simple, so here’s what you can claim for:
It's important to keep receipts and records detailing your expenditure. It gets more complex if you decide to combine business with pleasure and tack on a few days either side to enjoy the sights or catch up with friends and family while you are on a work trip. Note: It’s still important to keep records to prove what part of your trip was considered private and what part of it was business-related.
One of the most common questions we get is “can I claim my full return airfares if I am combining a business trip with a holiday?Let’s imagine your work has you travelling for work to UAE to meet with international clients and an exhibition to showcase your products. You plan to stay for an extra couple of days for sightseeing. If your sightseeing is just incidental, then you would be eligible to claim for the full cost of your return airfares. However, if the main purpose of your trip is not primarily for work and you visit a client because you are in Abu Dhabi, then you typically wouldn’t be eligible to claim on your airfares.
You are only entitled to claim on the actual nights you are away for business. Referring to the UAE example, you would not be entitled to claim for the extra night or two you spent sightseeing. This also applies to costs of meals and any other incidental travel expenses.
The exception to this rule is if you are away for business for an extended time, like a work conference where there are days where you have down-time between sessions, only then you may be eligible to deduct all your hotel and meal expenses.
Let’s look at another example where you are required to be interstate for a fortnight to undertake an onsite construction project or on location at a client's place of work. The accommodation for the weekend you are required to stay away at, even if you don’t undertake any work-related activities, is tax deductible. However, any touristy type activities and dinner out with friends who live in the area cannot be claimed.
There are a few travel expenses that you are not allowed to claim on such as:
If you are registered as a sole trader or partner, you are required to keep a travel diary for any travel of 6 nights or more. Be sure to record any dates, how long you were away and where you went
While businesses aren’t required to keep a travel diary by law, we highly recommend you do. And as a business owner, it’s crucial to abide by the tax laws when it comes to travel deductions. Attempting to write-off private travel as a business expense can attract unwanted attention from the Australian Tax Office (ATO), moreso if you are a public company.
Ensure that you stay within the ATO requirements for travel expenses while still getting every cent that you’re entitled to. If you have any doubts about what you can claim on for business travel and what you can’t, we’re here to streamline the process and ensure you get the maximum deductions.