If your clients do not earn any salary or wage income - Q1, they do not allow to claim deduction from D1 to D5.
To claim a work-related expense:
- Your client must have spent the money themselves and weren’t reimbursed.
- All the expenses to be claimed must be directly related to earning your client income
- Your client must have all record and evidence to prove it.
- Only claim a deduction for work-related portion if the expense was for both private and work purposes.
D1: Work related car expenses
The cost of travel between home and work is private used so you cannot claim as work deduction.
Clients only can claim a deduction for work-related car expenses if clients use their own car to perform their job for example:
- Travel to other workplaces rather than normal workplace for attending conferences or meeting.
- Using car to carry bulky tools or equipment which clients require to use for work and cannot leave at workplace.
- Employer requests your client to deliver items or collect supplies.
- Travel between normal workplace or client’s home to an alternative workplace.
- Perform itinerant work.
There are two methods available to calculate work-related car expenses (Only use one method)
- Cents per kilometer
- Before 2016-2017, different year has different rate per Km based on the size of the engine
- 2015-2016: 0.76. See the below table for information:
- 2016-2017: 0.66 cents per km (No longer based on the size of the engine)
- Maximum claim 5,000 Kms per car (No written evidence but must be able to show how your client worked out the kilometers).
- Logbook method:
- Client must provide written evidence for all expenses for car:
- Fuel, oil, insurance, rego, car repairs expenses etc..: provide either receipt or estimate amount based on odometer records.
- Percentage for work-use of the car expenses, client need to prepare logbook and the odometer readings for the logbook period (minimum continuous period of 12 wks).
D2: Work related travel expenses:
- Client can claim work related travel expenses if client travel between 2 separate workplaces etc.
- Please see the link for more information: https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Vehicle-and-travel-expenses/Travel-between-home-and-work-and-between-workplaces/
- If client’s employer requires your client to travel to difference located in country or oversea for visiting clients, attending conferences or meeting, searching for suppliers etc… Your client may be able to claim those following expenses as work-related travel expenses:
- Meals, accommodation and incidentals while stay overnight for work.
- The costs your client incur such as fuel: when using a borrowed car for work purposes, air/ bus/ train/ tram and taxi fares, car-hire fees etc…
Accountant can use either
- Taxation determination TD 2016/13 (Client need to provide number of day stay overnight for work purposes) or
- Client’s travel expenses receipts: Air ticket, taxi/bus/tram fares, accommodation, food & drink to claim for work related travel expense.
If client receive a travel allowance, client
- Must declare the allowance on tax return as income in order to claim travel expenses. (received allowance but not declare, client will not be entitled to claim a deduction for travel expenses)
- Does not claim exceed the reasonable allowance amount, client do not need to keep written evidence.
- Claims more than the reasonable allowance amount ATO set, client need to provide evidences of all the expenses.
*** Please do not include any private portion of your trip.
- If your total claims add up to more than $300 ((excluding claims for car, meal allowance, award transport payment allowance and travel allowance expenses), you must keep written evidence, such as receipts.
- Regardless of the amount of an allowance you receive, you can claim only a deduction for the expenses you paid
For more information please see: