With Tax Time upon us, many people will be lodging their tax returns over the next few weeks and hoping to get the best possible tax outcome. As part of that, it’s essential that you understand what you can – and what you can’t – claim against your taxes, so here’s a checklist of the deductions all workers in the travel industry should be considering claiming this tax year.
Remember, this list isn’t exhaustive and not all the deductions will apply to everyone. Similarly, you may be entitled to some deductions that aren’t listed here. Make sure you get professional help from a tax agent like H&R Block to ensure that you’re getting your return right
Travel and meals
You can claim the cost of travelling on your job – for instance, travelling between two offices or between the office and a client or customer. This includes public transport and taxi costs.
You can’t usually claim the cost of the daily commute to and from work.
If you plan to use your own car for work purposes, you can either claim a set rate of 72 cents per kilometre for all work journeys, or you can claim the actual expenses incurred. If you choose the latter, you’ll need to keep receipts for all costs (including road tolls and parking fees) and also keep a logbook of all your journeys for a 12-week period.
When it comes to claiming meals, you can only do so if the expense is incurred due to your being away for work. The same applies to accommodation and incidental expenses.
The cost of domestic and overseas travel where the purpose of the travel is for educational or research purposes can also be claimed, though there are a number of conditions that must be met.
Work-related clothing
You can claim a deduction for clothing that you’re required to wear as a uniform to work, provided the uniform has the company logo on it.
Temporary full expensing
If you own your own travel business (rather than being employed by somebody else), you can write off all items of capital equipment acquired during the year against this year’s profits. There is no limit to the number or items or the amount claimed.
Amongst the items you can claim are the following:
- TV sets and other equipment to build ambience
- Furniture for break-out or rest areas
- Office furniture and equipment, like desks, chairs and cabinets
- Technology such as laptops, desktop computers, phones and tablets
- Motor vehicles
Work-related training
You can claim expenses for university or TAFE fees to the extent that the course relates to your current employment and you’re not being reimbursed (for example Cert III in Tourism (Retail Travel Sales)). Don’t forget to claim for the cost of books, stationery, equipment and travel required for your course
In addition, the cost of work-related short training courses is claimable, for example wholesaler training or industry promotions, AFTA courses, first aid, OH&S, customer service, computer skills or management.
Other deductions
They may not be as significant in dollar terms as some of the items listed above, but make sure you claim the following:
- Any work-related subscriptions or membership fees (including your subscription with any travel industry magazines)
- Magazines, journals, books, apps or websites which are related to your work
- The cost of using your personal mobile phone for work-related purposes
- Entry fees to tourist attractions where the purpose of your visit is for research to assist you to recommend the attraction to your customers
Working from home
As a result of COVID-19, you probably had to relocate your working activity from business premises to your home for at least part of the year. If so, you can claim a rate of 80 cents per work hour, so you will need to keep a record of the number of hours you have worked from home as a result of COVID-19.
If you use the 80 cents per hour method, you can make no other claims in relation to working from home. So, items like mobile phone and internet usage are included in the 80-cent rate.
This 80 cent rate will cease to apply from 1 July 2022.
The alternative rate of 52 cents per hour may be more appropriate. This doesn’t include phone costs, home internet or the cost of writing off home IT equipment so when you make separate claims for those expenses, you may find that your total claim is higher. Your tax agent will be able to advise on which method produces the best results.
Remember to keep records!
Even if you’ve incurred any of the above expenses, the golden rule is that you can’t make a claim unless you can prove you spent the money (and also that you weren’t reimbursed by your employer). So, make sure you keep all relevant receipts, invoices, bank statements and credit card statements. If you’re not sure if you can make a claim, keep the receipt anyway and discuss it with your tax agent.
Get help
Using a tax agent like www.hrblock.com.au takes away the stress and opens up a whole world of expertise to guide you through the process of preparing and lodging your return, so you can be sure you’re claiming everything you’re entitled to.
Commentary to be attributed to Mark Chapman, Director of Tax Communications for H&R Block Australia
