Tax Tips: Tax ruling on travel released

Written by: Evan Lowenstein
Following on from many years ago when there was an upsurge in audit activity around travel, the ATO have now released the new version of their ruling on transport (TR 2021/1).

In addition, they have released a few draft rulings concerning travel, food and accommodation costs.

This form of travel was the subject of much debate as the ATO took a very hard line on our wonderful performing artists who were required to travel interstate for performances and often spent a long time away from home.

They sought to deny claims that were made despite the fact that they were complying with all the requirements of the old ruling (daily rates etc.).

In these rulings, they are seeking to clarify the circumstances when travel can be considered a deduction.

As a general rule, transport expenses incurred by an employee when travelling between home and a regular place of work are not deductible, while those incurred in travelling between work locations are deductible. They have listed factors to consider which include:

  • the obligation to incur transport expenses arises out of the employment itself and not the employee’s personal circumstances;
  • the travel is relevant to the practical demands of carrying out the employee’s work duties or role; the employer asks for the travel to be undertaken;
  • the travel occurs on work time;
  • the travel occurs when the employee is under the direction and control of the employer.


    • The ruling goes on to consider 12 examples, including things like:
  • non-deductible travel between home and regular work location(s) or a subsequent place of work that has become a regular work location;
  • deductible travel between home and an alternative work location;
  • non-deductible travel between home and a distant regular work location;
  • deductible travel between home and an alternative work location that requires overnight travel deductible travel between home and work locations, where travel is part of the employment duties of a person working for a tourism company;
  • non-deductible travel between home and work location not part of employment duties;


    • As far as overnight food and accommodation costs are concerned, the draft ruling that has been released also goes through some examples where travel may or may not be a deduction:
    Predictably, the ATO says that the deductibility of accommodation and food and drink expenses depends on the facts and circumstances of the particular case. Draft TR 2021/D1 uses a series of examples to illustrate whether such expenditure is deductible. These examples cover:
  • no requirement to sleep away overnight–expenses are not deductible;
  • personal circumstances – living and working in different cities or travelling between 2 regular workplaces –expenses are non-deductible;
  • work duties require frequent overnight travel –expenses are deductible;
  • living (for 4 months) at a location away from usual residence –expenses are not deductible; travelling on work for a 3-week period –expenses are deductible;
  • extended secondment to Australia (from 90 to 120 days) –expenses are not deductible;
  • employee relocated to another city for 2 years – expenses are not deductible;
  • business and private travel, where spouse accompanies employee – apportionment required; and
  • travelling on work (employee takes out 9-month lease but stays at rental property for combined period of 65 nights) – additional rental expenses are deductible.


    • For those of our clients with extensive travel claims (pretty much ‘nonexistent’ now due to COVID-19 travel restrictions) it may be worth reading.