Private ruling: Deductions – sole trader
Date of advice: 9 January 2018
Published: May 2018
Ruling period: Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2017

Ruling: Q1: Can you claim a deduction for your travel and accommodation expenses incurred for your sole trading activities? | A1: Yes. Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. When there is a direct connection between the expenses incurred and the activities performed as a sole trader, the expenses incurred for travel and accommodation is an allowable deduction provided you can substantiate the expenses claimed.

Relevant facts and circumstances: You are a sole trader. You previously lived and worked in one location. You have moved and relocated your business to another location. The volume of work in your field has dropped since relocating. Every few months you travel to your original location for the sole purpose of performing your sole trading activities.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1