Private ruling: Income tax - travel
Date of advice: 28 February 2024
Published: 15 April 2024
Ruling period: Year ending 30 June 2024 | Year ending 30 June 2025 | Year ending 30 June 2026 | Year ending 30 June 2027 | Year ending 30 June 2028
Date scheme commenced: 1 July 2023

Ruling: Q1: Are you entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the costs you incurred to voluntarily upgrade your airfares when your travel is for work-related purposes? | A1: Yes. You are entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the costs you incurred to voluntarily upgrade your airfares when your travel is for work-related purposes. Although the upgrade expense is incurred voluntarily, it still has the necessary connection with your income earning activities to be deductible under section 8-1 of the ITAA 1997.

Relevant facts and circumstances: You are permanently employed with XXXX. Your home base is XXXX. You are required to travel extensively for interstate and overseas work-related trips. Your employer's travel policy is to only pay for economy class tickets. Business class isn't available to the employee but they can take extra leg room or premium economy seats and claim the cost from the company. Your Enterprise Agreement states that your employer will allow employees to request upgraded travel class at time of booking but the employee must pay the difference. You will voluntarily pay for flight upgrades to business class because it provides you with greater comfort. Travelling business class will allow you to recover quickly from long-haul flights and enable you to better perform the required work-related activity.

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