Australians who combine business and personal travel are being urged to be extra vigilant this tax period as the ATO narrows its focus on work-related expenses.
With Australian business travellers now spending twice as much time on business trips as the global average, Corporate Traveller and Moneywise expect business travellers extending their trip by a few days to be a major focus for the ATO.
Tom Walley, global managing director of Corporate Traveller, said they expect a growing appetite for “bleisure” but said business travellers should “be particularly careful not to be scrutinised”.
John Tuohy, global general manager of Moneywise, warned taxpayers to ensure they keep adequate records, including scanned copies and a list of expenses, when mixing work and leisure.
“Travelers should keep a travel and expense diary. Often, notes in your calendar tool noting the date, time, duration and location of work-related activities will suffice as a ‘travel diary’ for tax purposes and justify deductions for certain and related expenses,” he said.
Mr Tuohy also warned employees against the temptation to claim a significant other’s expenses when taking them on a business trip.
“If you take your partner or family on these trips, you will incur costs that are clearly of a personal nature, such as additional costs for accommodation, meals and entertainment. Do not be tempted to deduct these from your taxes,” he said.
For example, if travelers consider taking a client on a business trip, Tuohy said employees can claim the client’s entertainment expenses, but only if the purpose of the expense is income-generating.
“Discussing business between parties, a project or negotiating a business outcome is more likely to be deductible. These cases would likely be covered and reimbursed by the employer, and that is more relevant to business owners than employees,” he said.
Mr Tuohy also pointed out that weekend accommodations could be deductible if business operations extended from Friday to the following Monday.
Mr Tuohy’s final tip for taxpayers is to avoid “double-counting” and potentially attracting the attention of the ATO by claiming expenses reimbursed by their employer.