Private ruling: Substantiation relief
Date of advice: 15 June 2015
Published: June 2015
Ruling period: Year ended 30 June 2004 | Year ended 30 June 2005 | Year ended 30 June 2006 | Year ended 30 June 2007 | Year ended 30 June 2008
Date scheme commenced: 1 July 2003

Ruling: Q1: Will the Commissioner provide substantiation relief and accept the work related car expense deduction amounts provided? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Division 900.

Reasons for decision: Summary: Division 900 of the Income Tax Assessment Act 1997 (ITAA 1997) sets out the substantiation rules that apply to work expenses, car expenses and business travel expenses. Subdivision 900-H of the ITAA 1997 provides relief from the effects of failing to substantiate in certain circumstances. As outlined in section 900-195 of the ITAA 1997, not doing something necessary to follow the substantiation rules does not affect your right to a deduction if the nature and quality of the evidence you have to substantiate your claim satisfies the Commissioner that you incurred the expense and that you are entitled to deduct the amount you claim. Section 900-205 of the ITAA 1997 provides guidelines if your documents are lost or destroyed. Under subsection 900-205(3) of the ITAA 1997 if the lost or destroyed document was a log book, you do not need to replace it and your deduction is not affected by your failing to retain or produce the document. Taxation Ruling TR 97/24 Income tax: relief from the effects of failing to substantiate provides guidance on circumstances in which relief from the effects of failing to substantiate may apply. A bona fide attempt should be made to comply with the record keeping requirements. After considering your specific circumstances and from the information provided, the Commissioner will accept that you have incurred car expenses and that X% of your car expenses are work related. You are therefore entitled to the work related deduction for your car expenses.

Relevant facts: In 2015, you lodged your tax returns for the 2004-05 to 2007-08 financial years. | You have not yet lodged your tax return for the 2003-04 financial year. | You completed a log book in the 2003-04 financial year, however the document was accidently lost when you moved. | You prepared a log book in the 2009-10 financial year which showed your work related kilometres as X%. | You have had a similar job for the relevant years. | You have gone through significant issues over the years and were unable to lodge your tax returns on time. | You received a car allowance each year. | You have substantiation and details of your car expenses including registration, insurance, interest on car loan, petrol, tyres and depreciation. | You have not finalised the car expense amounts for the 2003-04 financial year, however the total car expenses are estimated to be less than the allowance received. | You wish to claim X% of your car expenses.