question for Living away allowance

yw0830

Client's PAYG Payment Summary only recorded his base salary for $57000, not included in any travel allowance or living away allowance which was already paid to his bank account. By adding up all these allowances, his actual money receipts should be about $100,000 after tax.

Client would like to claim his travel expenses and leaving away expenses, and I said "no". Because he has already received tax free allowance which was not included in his PAYG Payment Summary.

His friend was also our company client who had the same situation. My colleague has already claimed the travel expenses in his friend's tax return. Therefore, this client asked for why I rejected his claim.

Today afternoon, my colleague told me another story saying that there's one client has already received private rulling which allowed her to claim the "difference" between government rate on the maximum claims of travel expenses, and the allowance paid by the company.

for example:            Government rate:                $250/per day
                               Company paid allowance:    $200/per day
                                                                         ----------
                               Difference:                           $  50/per day

So thus, client could claim $50 per day as his travel expenses.

I couldn't agree with it.

Has anyone come across it?

sissi1987220

I think your colleague is correct.

Take a example: A guy spent $500 for whatever associated to work (which should be totally tax deductible if he doesn't receive any allowance), and he received $ 200 from employer  for LAHA, the difference of $300 should still be tax deductible as long as it incurred during earning his income.

I hope it helps.  

simonwang

sissi1987220 发表于 2013-1-16 02:04
I think your colleague is correct.

Take a example: A guy spent $500 for whatever associated to wor ...

LAFHA is not associated with work so no income tax deduction.

simonwang

The main point is how much the client actually spent, if he only spent $200, no way he can claim the rest $50 for income tax deduction. If he spent $250 or even more while the company pays $200, yes, he can. But better to get the company to pay the gap instead of claim tax deduction.

TD 2012/17 and TR 2004/6 might be helpful.

http://law.ato.gov.au/atolaw/vie ... AT%2FATO%2F00001%22

http://law.ato.gov.au/atolaw/view.htm?locid='TXR/TR20046/NAT/ATO'

For LAFHA, as it is not work-related expenses (instead it is a fringe benefit provided by the employer), no income tax deduction is allowed. If the employee had higher food cost, with evidence, the employer can pay him more than the ATO determined reasonable amount without FBT liability. But the employee must retain the substantiation and no income tax deduction is available.