Employees Denied Deductions for Work Related Expenses

When travelling with his family, an employee photographer has been refused travel expense deductions, and other intended work related expenses.

The AAT maintained that as these expenses were mainly incurred during a family holiday and were therefore non-deductible, as they were in nature domestic and private. It is important that if you are to travel for business and decide to take this opportunity to also include a family holiday, that it is done in the proper manner. We always recommended that you demonstrate the true nature of the trip first, by:

• Prior to making any travel arrangements, prepare and confirm any and all business appointments in writing
• Keep a log of all business activities on said trip, either through a diary or notes
• Keep receipts of all expenses and track how they incurred

In relation to the taxpayer's reliance on bank statements in the loss or absence of receipts and/or invoices, the ATT observed that “evidence of the mere transfer of funds, be it by way of bank transfer or by any other means, is not sufficiently informative of the actual character of an expense", so the other disputed expenses couldn't be claimed as deductions.

Here at XOAccounting we provide our clients with a FREE App available on both Apple and Android phones, called XTax. XTAX can record your expenses and keep copied of all receipts in case the ATO requires them. To find out more, click HERE.

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