Camping allowance - eligibility for the exception from substantiation

Can the taxpayer claim a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) up to the amount of camping allowance received without the need to substantiate the expenditure?

Yes. The taxpayer can claim a deduction for accommodation, food, drink and incidental travel expenses under section 8-1 of the ITAA 1997 up to the amount of the camping allowance received without substantiation, as the allowance is considered to be reasonable and has been fully expended on travel.

The taxpayer's employment requires them to occasionally work at various different sites.

The taxpayer is paid a camping allowance when staying overnight at camp sites and caravan parks. The allowance covers the cost of accommodation, food, drink and incidental travel expenses.

The allowance for the accommodation component of the camping allowance is commensurate with camping and caravan parks in the region that the taxpayer is required to work.

The food, drink and incidental travel expense component of the camping allowance does not exceed the Commissioner's reasonable allowance limits.

The taxpayer expends all of the camping allowance on those items of expenditure.

A camping allowance that is paid to a taxpayer for short periods of travel (less than 22 days) is considered to be a travel allowance and not a living-away-from-home allowance (Taxation Determination TD 93/230 and Taxation Ruling MT 2030). The allowance is included in assessable income under the ordinary income provisions.

Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, relate to the earning of exempt income, or a provision of the Act prevents a deduction being claimed.

Travel expenses incurred in the course of a taxpayer's work are deductible under section 8-1 of the ITAA 1997.

Division 900 of the ITAA 1997 requires an individual taxpayer who incurs a work expense to substantiate that expense. Subsection 900-30(2) of the ITAA 1997 provides that a travel allowance expense is a work expense which is covered by a travel allowance for a loss or outgoing that is incurred for accommodation, food, drink or incidental travel expenses.

Subsection 900-50(1) of the ITAA 1997 provides an exception from the substantiation requirements. A domestic travel allowance expense can be deducted without written evidence if the Commissioner considers that the total of the losses or outgoings for travel covered by the allowance are reasonable.

In deciding whether the total of losses or outgoings are reasonable, subsection 900-50(2) of the ITAA 1997 provides that the Commissioner must take into account the total of the following kinds of losses or outgoings that would be reasonable to incur for travel: • accommodation; • food or drink; • losses or outgoings incidental to the travel.

Taxation Ruling TR 2004/6 explains the substantiation exception and each income year the Commissioner publishes amounts that are considered to be reasonable for the purposes of that exception. It is the Commissioner's practice to publish these reasonable amounts in a Taxation Determination issued before the start of each income year. However, the accommodation rates for domestic travel in the Taxation Determinations are restricted to situations where accommodation is taken up in hotels, motels or serviced apartments and do not provide guidance as to what constitutes a 'reasonable' camping allowance.

The Taxation Determinations and Taxation Ruling TR 2004/6 do however show that relevant factors such as the cost of accommodation, food, drink, and incidental travel expenses across the region and in a range of surveys should be taken into account. Additionally, the Commissioner will have regard to salary levels, the circumstances for payment of the allowance and occupational aspects when determining a reasonable amount.

The taxpayer receives a camping allowance for staying overnight at camping sites and caravan parks for work purposes. As the taxpayer is away from their ordinary residence for only short periods of time, the allowance is not considered to be a living-away-from-home allowance and is assessable under the ordinary income provisions.

The Commissioner considers the amount of the camping allowance received by the taxpayer is reasonable having regard to the cost of accommodation in the area the taxpayer is located and the reasonable allowance limits for food, drink and incidental travel expenses. As the taxpayer also spends all of the allowance received on travel, the taxpayer is entitled to claim a deduction under section 8-1 of the ITAA 1997 up to the amount of the camping allowance received without the need to substantiate the expenditure. Note: if the taxpayer claims a deduction in excess of the allowance received, the taxpayer will be required to substantiate the whole of the claim made.

Date of Amendment Part Comment 8 May 2015 Decision Added that amount must have been incurred Reasons for Decision Amended to apply broadly rather than to a specific income year. Reference to TR 2000/13 removed. Reference to TR 2004/6 added. Added that the allowance must have been fully spent on travel. Related Public Rulings (including Determinations) Added TR 2004/6 Removed TR 2000/13 Keywords Grammatical change Additional words added

Date of Amendment | Part | Comment

8 May 2015 | Decision | Added that amount must have been incurred

Reasons for Decision | Amended to apply broadly rather than to a specific income year. Reference to TR 2000/13 removed. Reference to TR 2004/6 added. Added that the allowance must have been fully spent on travel.

Related Public Rulings (including Determinations) | Added TR 2004/6 Removed TR 2000/13

Keywords | Grammatical change Additional words added