Getting Rid of Tax Receipts While Travelling

I recently did a technical presentation in worldstravelonline to a group of family business people. And while the material, and discussions afterwards, were enlightening, I was eager to see some of this great city.

A group of us went to the Skybar. It was incredible. The view was amazing. The people (except me of course) were dead set beautiful and the atmosphere was electric. I had one night in this city and I wanted to really experience it.

The guys with me were also present at my seminar. The conversation moved around but it inevitably came back to how our business tried to impact on families that were branching overseas – and Asia in particular.

It then became my time to buy a drink for the group.

A beer cost AUD $25. Ouch.

And there was 16 of us present.

Double ouch.

Anyway. I sucked it in and bought a round. At no stage could I have done a runner on the group. Firstly it is not cool and secondly it would have been the kiss of death for any fledgling relationship.

But the question hangs. Was it fair of me to charge this cost to my business? How do you make sure everybody is equal? How do you balance up needs of different owners? Can I get a tax deduction? And how do you keep receipts for all this stuff?

Enter the concept of a travel allowance. These things basically take away the need to keep receipts while travelling so come tax time your life managing a family business is a lot easier.

So what is a travel allowance?

It is a payment to cover the costs while an employee is travelling away from home for work. Typically a travel allowance covers the cost of meals, incidentals and accommodation in Australia but only the cost of meals and incidentals while overseas – and it does not need to be backed up tax invoices.

You can pay a travel allowance to any employee even if they do not receive a salary. This is important in a family business as family members are often working directors but do not receive a straight PAYGW salary.

How much is the travel allowance?

Each year the Tax Office issues guidelines as to how much the allowance can be for a person. The current allowance rates are at TD 2016/13 and most people find the rates relatively generous.

And the rates are staggered to allow for different levels of seniority in the family business to be recognised.

The main benefit

If you are paid a bona fide travel allowance while travelling you can claim a tax deduction for the same amount without keeping receipts to prove it.

This is important. Most often people, especially family members, will give up on the tax deduction as it is simply “too hard”. Receipts will also be lost and the receipts could be in another country so they are borderline useless in understanding what you did a while back.

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