Where travelling expenses are incurred in relation to that travel, it is important to ensure that appropriate records are maintained to demonstrate that the expenditure is deductible and not subject to Fringe Benefits Tax (FBT).
Maintaining a travel diary
In addition to records of the expenditure incurred, it is often critical that a travel diary be maintained.
Specifically, a travel diary is required for FBT purposes where the employer is meeting the travel costs and the:
travel is undertaken within Australia for more than five consecutive nights, and that travel is not exclusively for performing employment-related duties; or
travel is undertaken outside Australia for more than five consecutive nights.
Additionally, employees who wish to claim a tax deduction for their out-of-pocket travel expenses may also be required to maintain a travel diary. The requirements vary depending on whether a travel allowance is received, the duration of the travel and whether the travel is undertaken within or outside of Australia. Please refer to the ATO website for details on when a travel diary is required.
What to record
Tax Ruling MT 2038 sets out the necessary details that need to be captured in a travel diary. These are:
the place where the activity was undertaken;
the date and approximate time when the activity commenced;
the duration of the activity; and
the nature of the activity.
Please refer to the attached for a simple travel diary template that you can use to satisfy your record keeping obligations and to ensure the best possible tax outcomes.