Private ruling: Travel expenses
Date of advice: 22 January 2018
Published: June 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for your accommodation expenses whilst training interstate? | A1: Yes | Q2: Are you entitled to a deduction for meal expenses that you are unable to substantiate whilst training interstate? | A2: No

Relevant facts and circumstances: You are employed. Your employer approved leave for you to complete a training program to enhance your existing capabilities, skills and knowledge. The period of the leave was approximately X weeks. The skills acquired from the training will assist you in the performance of your current employment duties. You commenced at the training on xxxxxx and your last day was a half day xxxxx. You attended the training each working day for the entire period of the training. You also attended one weekend morning training course. You booked accommodation which was within walking distance to the training location. Your relatives accompanied you interstate. Your relative visited and stayed with you from xxxxxx, there was no additional accommodation charge to have additional guests at the accommodation. You continued to maintain your home whilst you were interstate. Your employer continued to pay your regular base salary while you were training. Your employer provided a letter approving your leave dated xxxxx, fully supporting the program chosen. You were not reimbursed or paid an allowance by your employer for any accommodation or meal expenses while training interstate. You did not keep a dedicated “travel diary” however you have kept required records of your travel. You have not kept receipts for food purchased whilst interstate.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 900-20 | Income Tax Assessment Act 1997 Section 900-145 | Income Tax Assessment Act 1997 Section 900-150(1)

Reasons for decision: Summary: 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. Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses if a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge. Similarly, if the study of a subject of self-education objectively leads to, or is likely to lead to an increase in a taxpayer's income from his or her current income earning activities in the future, a deduction is allowable. In your case, the training you undertook will assist to increase your skills and knowledge in your occupation. Consequently the travel expenses you incurred will have the necessary and relevant connection with the earning of your assessable income and are allowable as a deduction. | Detailed Reasoning - Substantiation of travel expenses: Section 900-20 of the ITAA 1997 states you need to keep travel records if your expense is for travel that involves you being away from your ordinary residence for 6 or more nights in a row. The travel may be within or outside Australia. Section 900-145 of the ITAA 1997 states, “The purpose of a travel record is to show which of your activities were undertaken in the course of producing your assessable income, so that your losses or outgoings, or portions of them, can be attributed to income-producing purposes”. Section 900-150(1) of the ITAA 1997 states you record an activity by specifying in a diary or similar document : (a) The nature of the activity (b) The day and approximate time when it began; (c) How long it lasted; (d) Where you engaged in it. In your case, you can claim a deduction for your accommodation expenses provided you can substantiate the expenses; however you cannot claim a deduction for meal expenses as you did not keep your receipts.