Mixing business and pleasure? Be vigilant this tax season
With the ATO sharpening its focus on work-related expenses, Corporate Traveller is warning ‘bleisure’ travellers to be careful.
Increased vigilance is needed for those mixing business with pleasure ahead of the 2024/2025 tax filing period business travel management and solutions provider Corporate Traveller has suggested.
Corporate Traveller, in partnership with financial manager and tax agent Moneywise, have predicted that the ATO will have a particular focus on for bleisure travellers, given that – according to Allied Market Research – such travel expenses are set to more than double to $731.4 billion over a 10-year period.
Amidst such a potential crackdown, Moneywise global general manager John Tuohy advised being fully prepared to file one’s taxes, lest one run the risk of an audit.
“What most people don’t realise is that employees have until 31 October to file the 2025 financial year’s taxes. If you register with a tax agent, that deadline is extended until mid-May 2026, which is great for those who want to delay any tax payable,” he said.
“So, don’t rush it unless you know your tax is relatively simple and you’re expecting a refund.”
“There are over 14,000 pages of tax law in Australia, meaning there are lots of incentives and terms and conditions, and with the ATO focussing this year on work-related expenses, it’s particularly important to take that time to get it right, and to understand the nuances to avoid audit triggers,” Tuohy continued.
Corporate Traveller global managing director Tom Walley added: “This tax season, business travellers should take extra care to avoid scrutiny.”
“Keeping on top of your documentation should be a priority for every business traveller. This proactive approach will help you manage your tax obligations while travelling, and ensure you are compliant with Australian tax laws,” he said.
For the looming financial year, Tuohy recommended keeping a diary for work expenses: “. Often, appropriate annotations in your calendar tool noting dates, times, durations, and places of work-related activities will suffice as a 'travel diary' for tax purposes and will substantiate deductions for specific and associated expenses.”
Professionals should also note, he said, that incidental and reasonable travel deductions can include Saturday and Sunday accommodation when necessary for business requirements on a Friday and the following Monday.
“Taking a partner or family on these trips would incur expenses that are clearly of a private nature, such as additional accommodation, meal and entertainment expenses. Don't be tempted to claim these on your tax. Similarly, when you extend travel for leisure before or after a work travel requirement, you will be expected to apportion the leisure component to private and non-deductible expenses.”
Elsewhere, Tuohy said that client entertainment expenses can be claimed, but only if the purpose of the expense is income-generating business related.
“Discussing business between parties, a project or negotiating a business outcome is more likely to be deductible. These cases would likely be covered by the employer and reimbursed, and this is more relevant to business owners than employees,” he said.
