Private ruling: Deductibility of travel expenses
Date of advice: 11 October 2018
Published: December 2018
Ruling period: Year ended 30 June 20xx | Year ended 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Are you entitled to claim a deduction for travel to and from the airport, meal expenses and other incidentals incurred when travelling and staying overnight on business under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. In your case, the provision of XXXXX is your main business activity and how you produce assessable income. It requires you to be away from home in order to generate income in the business. Therefore, the expenses are considered to be connected to the production of your business income and have the essential character of a business expense. You are entitled to claim a deduction under section 8-1 of the ITAA 1997 for your meal and travel expenses. Further information about overnight business travel expenses can be found by searching 'QC 44448' on ato.gov.au

Relevant facts and circumstances: You operate a sole trader business. You are a self-employed service provider (sole contractor) working around the country at various organisations. Your home base is in XXXX. You have engaged in contracts with a number of states. Your work requires that you relieve employees for periods of a few days to several months at a time. You do not have a regular place of work in undertaking your duties. You travel to various locations to relieve the physicians in the regional areas and you stay in short term accommodation which is provided for you under your contract. You are required to stay away from home for several nights to conduct your business activities. You are not required to pay for travel or accommodation whilst you are away working as they are provided on your behalf. Your contracts state that “The parties agree and acknowledge the XXXXXXXX is an independent contractor and not an employee of the Board and the Board is not responsible for any legal obligations, liabilities and expenses in respect of personal taxation, worker’s compensation, superannuation, leave entitlements and the like…” Your contract specifies that remuneration is by way of the submission of regular Tax Invoices including GST if you are registered. You are required to organise your own transport to and from the airport for any flights taken. You also incur meal expenses and other incidental costs when travelling and staying overnight You have incurred costs relating to the travel to and from the airport and also meal expenses whilst you are conducting your business activities.

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