Travel allowance deductions

Last year an Administrative Appeals Tribunal (AAT) decision, Gleeson and Commissioner of Taxation [2013] AATA 920, was issued regarding a substantiation exemption for expenses incurred by a taxpayer while travelling overnight for work purposes.

The AAT found that the taxpayer had incurred food and drink expenses while on trips away from home and had received a bona fide travel allowance to cover the expense. The taxpayer was therefore entitled to rely on the exemption from the substantiation provision when claiming deductions.

The Australian Taxation Office has now issued a decision impact statement which reminds taxpayers that this decision was based on the facts of the case and does not present any new principal of law.

Where an individual receives a bona fide travel allowance and relies on the Commissioner’s reasonable amounts for claiming travel expenses, the taxpayer is still expected to be able to demonstrate that expenses have actually been incurred.

Cristy Houghton