Tax Office Cracks Down on Work-Related Expenses for Business Travellers Mixing Business and Pleasure

The Tax Office is cracking down on work-related expenses for travellers who mix business and pleasure, with increased scrutiny expected this tax season. According to industry experts, Australians’ business trips are twice as long as the global average, with an average of six nights compared to 3.5 nights worldwide.

The trend of blending business trips with personal leisure time, known as “bleisure” travel, is on the rise due to reduced flight costs and strong travel trends. However, travellers are being warned to take extra care this tax season to avoid scrutiny from the ATO.

The ATO has identified work-related expenses as one of its focus areas this tax time, along with rental deductions and income sources. Over 8 million people made work-related claims last year, prompting the ATO to urge taxpayers to follow three golden rules when claiming expenses.

Experts advise travellers to delay filing their taxes until they are fully prepared, as the Australian tax law is complex and there are many incentives and terms and conditions to consider. Keeping detailed travel diaries of work expenses and avoiding double dipping on claims are key tips for “bleisure” travellers.

While legitimate client entertainment expenses and weekend accommodation may be deductible, taking family on trips or extending travel for leisure before or after work commitments is not allowed. Day travel expenses are also not tax deductible unless they are associated with an overnight work trip.

With the deadline for tax returns on 31 October, or mid-May for those registered with a tax agent, travellers are urged to take the time to understand the nuances of work-related deductions to avoid audit triggers. It’s important to get it right to ensure compliance with tax laws and avoid any potential penalties.