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TRUCK DRIVERS TAX RETURNS

For the year ended 30 June 2017

Work related uniforms, protective clothing and laundry

Laundry: You may claim up to $150 without receipts.

Protective clothing is generally tax deductible if it is designed to protect:

Many truck drivers claim steel capped boots, uniforms or high visibility shirts & trousers and gloves.

 

Work Expenses: - Take photos of your receipts using your mobile.

Tools

Bedding

Sun Protection & Sun Glasses

 

Electronic Equipment:

Mobile Calls - Please apportion using a 28 day itemised phone bill

Mobile Data Downloads - Please apportion using a 28 day A4 diary

Internet - Please apportion using a 28 day A4 diary

iPads - Please apportion using a 28 day A4 diary

Laptops - Please apportion using a 28 day A4 diary

(Diaries are easy to set up by using an A4 pad with a line down the middle then write "work" on the top of the left hand side and "private" on the right then number 1 to 28 days vertically on the leftside of the page)

 

Log books, stationery & pens

Truck Licence

Truck Washing & Cleaning

Refrigerator & Cooking Stoves

Union Fees

 

PRIVATE USE APPORTIONMENT

If there is private use (other than incidental use) a 28 day diary is required once every year.

A diary can be a simple A4 pad with a line in the middle with work & private on opposite sides.

 

RECORDS

You may claim $200 worth of items costing < $10 without receipts.

 

REASONABLE OVERNIGHT TRAVEL ALLOWANCE FOR TRUCK

DRIVERS $97.40 from 1 July 2017 $99.60

Davy's Case AATA 376 (27 March 2017)

Para 66. "Thirdly, regardless of whether a taxpayer relies on s 900-50 of ITAA 97, they may nevertheless be required to show the basis for determining the amount of the claim, that the expense was actually incurred, and that it was for work-related purpose. In other words, as is stated on s. 900-15 of ITAA 97, the taxpayer may need to produce evidence that the claim qualifies as a deduction under the general provision in s. 8-1 of ITAA 97."

Taxation Determination TD 2015/14 Para 3

Expenses claimed must have been incurred and be an allowable deduction - The payment of an allowance does not of itself allow a deduction to be claimed.

Taxation Ruling TR 2004/6 Para 15

If the taxpayer relies on the exception from substantiation, they may still be required to show, the basis for determining the amount of their claim, that the expense was actually incurred, and that it was for work-related purposes. What counts as evidence for a claim subject to the substantiation exception will vary according to individual circumstances and the nature of the expenses.

Taxation Ruling TR 95/18 Para 12

The receipt of an allowance does not automatically entitle a truck driver to a deduction.

 

CONDITIONS - OVERNIGHT TRAVEL ALLOWANCE

1. You must be paid an overnight travel allowance not an inconvenience or other allowance -

A 'bona fide travel allowance' is an amount that could reasonably be expected to cover accommodation, or meals or expenses incidental to travel. This does not require that the amount paid by the employer must equate dollar for dollar to the employee's actual expenditure. However there must be relativity between the quantum of the travel allowance and the purpose for which it is said to be paid. A token amount, or a general payment, is not a bona fide travel allowance. In this context the words 'cover' and 'covered' refer to the nature of the expenses for which the allowance is provided, that is the subject matter to be dealt with by the allowance paid, namely accommodation and applicable meal expenses. (See Re McIntosh and F.C. of T. [2001] AATA 702; 47 ATR 1242).

 For accommodation, meal and incidental expenses to be considered under the exception from substantiation, the meal allowance must be a bona fide travel allowance (refer to TR 2004/6) paid or payable under a law of the Commonwealth or of a State or Territory, or an award, order, determination or industrial agreement in force under such a law (section 900-60 of the ITAA 1997).

2. You will need a letter from your employer stating that the payment is a bona fide travel allowance paid for meals, the amount of the allowance and the number of allowances paid during the year.

3. You must be an employee (not a sole trader or partnership).

4. You must be away from your ordinary residence. You must sleep away from your home.

5. You must not stay in one town for more than 21 consecutive days (Roads and Traffic Authority of NSW case; MT 2030).

6. You should try to prove a regular pattern of expenditure and have diary, receipts or bank statements for 28 days. Try to keep as many receipts as possible. Take photos of your receipts using your mobile.

7. Your claims have to be consistent with the employees occupation and type of expense.

E.G. 

Breakfast - hot breakfast $15, coffee $4 = $19

Lunch - counter lunch $15, coffee $4 = $19

Dinner - steak $25, schooners $15 = $44

Snacks - chips & bars $10, red bulls $18, water $5 = $15

Total = $97

 

TD 20017/19 Example 2 Para 20:

If Michelle's tax return is checked by the ATO she may be asked to explain her claim for decuctions. To do this Michelle would show she travelled to and worked in Sale for 4 days each month, that she reveiced an allowance for the meals and incidentals for each day she travelled, that she correctly declared this allowance as income in her tax return, and that she typically spent $85 a day on meals and incidental expenses (for example, by reference to diary entries, bank account records and receipts that she kept for some of the trips).

Para 21:

If Michelle had spent more than the reasonable amount on meals and incidentals and wanted to claim the higher amount that she spent, she would need to get and keep all of the receipts.

 

 

ATO reasonable overnight travel allowances for meals

As per Tax Determination 2016/13 for the year ended 30 June 2017.

                             

Truck Drivers          $  97.40       From 1 July 2017   $99.60

FAIR WORK AUSTRALIA ACT - 13 13 94

ROAD TRUCK DRIVERS MODERN AWARDS

ENTERPRISE BARGAINING AGREEMENTS

Which award is yours or do you have an Enterprise Bargaining

Agreement?

Check with Fair Work Australia Truck Driver Modern Awards 13 13 94

Under the RSR System, the Road Safety Remuneration Tribunal (the RSRT) can make decisions about pay and related conditions in the road transport industry for road transport drivers. These decisions are called road safety remuneration orders (orders). RSRT can also make arbitration orders when dealing with a dispute.

Road Transport (Long Distance Operations) Award 2010

This Fair Work Commission consolidated modern award incorporates all amendments up to and including 18 June 2015 (PR566710),18 June 2015 (PR566849) and 26 June 2015 (PR568050).

(c) Travelling allowance

[14.2(c)—Living away from home allowance renamed by PR551128 ppc 08Jul14]

[14.2(c)(i) varied by PR998149,PR523022,PR536825,PR551748,PR566849 ppc 01Jul15]

(i) An employee engaged in ordinary travelling on duty or on work on which the employee is unable to return home and takes their major rest break under the applicable driving hours regulations away from home must be paid $38.43 per occasion. This will not be payable where an employee is provided with suitable accommodation away from the vehicle.

(ii) In exceptional circumstances,where amounts greater than those specified are claimed, an employee will need to demonstrate why the claim is necessary and gain approval from a representative of the employer. Such approval will not be unreasonably withheld.

Historically in some Enterprise Barganing Agreements negotiated between Employer's Human Resources Departments and Unions there is no mention of Bone Fide Travel Allowances for overnight meals. Instead there are only references to inconvience or accommodation allowances. 

e.g.  In the above Fair Work Australia legislation for Overnight Truck Drivers there is only reference to accommodation allowance and no mention of meals. This is outdated as most drivers sleep in their cabs.

This means that technically you may fail the definition of Bona Fide Travel allowance for meals and cannot  use the ATO Overnight Travel Allowance Commissioners Rates and records substantiation rules for meals. You then must rely on actual receipts for 12 months instead of 28 days.

In practice the ATO is accepting that in these cases accommodation allowances are extended to meals and therefore you may use the commissioner's rate provided that you can show a regular pattern of expenditure using actual receipts or other records for a 28 day period. My point is that you can see how technical this can get.

These Road Transport Awards have not kept up with the times as it is too onerous to expect  employees to keep records for 900 meals. The Fair Work Australia legislation needs to be amended to reflect modern times. Lobby your member, union and employers to change these definitions.

Read your EBAs carefully and specifically review the definitions of all allowances that you receive. It must state that the allowance is for overnight meals, accommodation and incidentals. 


 

NEW ATO GUIDELINES CONSULTAION PROCESS UNDER WAY

[201529] Domestic travel allowance expenses – reasonable rates and safe harbours for meals, incidentals and accommodation

David,

Thanks for your email.

The ATO is aware of the current dilemma that many taxpayers are confronted with when claiming for meals and incidentals associated with travelling on work.

A person can only claim what they incurred. But they don’t need to keep receipts if not claiming more than the Commissioner’s published rate. So how do they work out what they incurred? And how do they satisfy the Commissioner that they have only claimed what they incurred?

My advice to people in this situation is to summarise a daily or weekly meal cost and use that as a guide. They may be able to use bank account withdrawals or credit card statements to refresh the memory. It would be rare for the amount to come anywhere near the Commissioner’s rate unless such travel is infrequent and they live it up when they travel.

The ATO has publicly noted that it is consulting on the issue and I am the contact. I am awaiting an internal report based on data analysis before I actually have any external conversations. I have been advised that the report is almost ready.

What we are hoping to achieve through the consultation is a safe harbour amount that requires no records and some rules for records to keep when substantiation is not required and you are claiming between the safe harbour amount and the Commissioner’s rate.

Please call me if you wish to discuss.

Michael Majoor 
Director, New Measures & Priority Issues, Small Business/Individual Taxpayers

Australian Taxation Office
Phone: 02 9354 3158 | Facsimile: 02 9685 8666

I am very interested in Michael Majoor's reference to safe harbour amounts where no receipts are required. You will notice that Michael thinks that this amount will be less than the Commissioners Rate for truck drivers of $99.60.

ATO Issues

The Australian Taxation Office have informed me that you may claim up to the maximum Australian Bureau of Statistics Public Service Rates (TD 2017/19), if the allowance does not appear on the payment summary as long as the allowance is shown as assessable income in the tax return without having to substantiate expenses as per Tax Ruling 2004/6 paragraph 11, 15, 25, 31, 37 & 39. 'Where the allowance is not required to be shown as assessable income in the employee's tax return, and is not shown, a deduction for the expense cannot be claimed in the tax return.'

I  include the allowances not appearing on the payment summary as income at Item 1 Salary & wages - allowances on the tax return and claim the ATO rate at D2.

'The object of this ruling is so you can decide between either maintaining fewer records and claiming up to the reasonable amount for those deductible expenses actually incurred that are covered by the allowance or keeping written evidence to substantiate your claim. It is acceptable for a reasonable estimate to be the basis for claims having taken into account the taxpayer’s occupation and type of expenses that would usually be incurred. This is a significantly lesser requirement than the need to keep written evidence.'

You however must be able to prove to the ATO a reasonable pattern of expenditure for 28 days to show how you spent your meal allowance. Take photos of your receipts using your mobile.

I have had serveral ATO audits this year by ATO auditor and compliance manager Wolfgang Kleeberg. He and his fellow auditors are happy to clarify these issues. Please call him on 0457 717 696 or 07 3149 5459.

OVERNIGHT TRAVEL EXPENSES WITH NO TRAVEL ALLOWANCE

PAID TO TRUCK DRIVERS

TD 2017/19 Para 23:

Employee truck drivers who do not reveive a travel allowance and

truck drivers who are owner-drivers must substatantiate all travel

expenses with written evidence (refer to paragraphs 76 to 80 of

TR 2004/6).

 

CONDITIONS

1. You must be stay overnight away from your usual place of work.

2. You must not stay in one town for more than 21 days (Roads and Traffic Authority of NSW case;

 MT 2030).

3. You must keep receipts and diary notes. Take photos of your receipts using your mobile.

PLEASE SUMMARIZE THE FOLLOWING:

Accommodation if not in the truck

Meals

Water & Drinks

Caffeine drinks - Coffee, mothers, red bulls, etc.

Snacks

RECORD KEEPING

Taxation Ruling

TR 97/24

Example 1

46. Tom, a truck driver, has been requested to substantiate his meal expense claim of $4,000 made in respect of the 1995 income year. He was not paid any allowance in respect of these meals which were incurred when required to sleep away from home while on work trips. Tom maintained a log book that shows he was required to sleep away from home on 100 occasions during the year. Tom has a combination of receipts and diary entries to support the amount of meal expenses for 95 of the 100 work trips he was required to sleep away from home. However, for five nights the diary entries did not record all required information, but Tom states that the cost of meals was similar to other trips. His diary entries show that he spent at least $40 a day on food and drink when required to sleep away from home and this is supported by the receipts he has available. In respect of the five trips where diary entries were not fully completed, his receipts, log book and diary support the fact that he spent at least $40 a day on meals on similar trips to those destinations.

47. Tom requests the Commissioner to exercise the discretion to accept that $200 was incurred for work-related meals on the five trips where diary entries were not fully completed. He claims he is entitled to this deduction in addition to the amount of $3,800 that has been substantiated. Since Tom can show that on similar trips he continued to spend $40 a day, in light of the nature and quality of the evidence available by way of log book entries, diary entries, receipts and the taxpayer's statements, it would be appropriate to apply the discretion to grant relief from the effects of the failure to substantiate expenses.

ATO Practice Statement LA 2005/7

In some circumstances BPAY and internet banking statements may include sufficient details to support the correctness of your claims. Suppliers may not issue a receipt containing all the information required by the substantiation legislation. However you may use a combination of other documents to support your claims.

In some cases if a credit card statement has the date of the transaction, the name of the supplier and the amount paid and you make a note on the credit card statement detailing the items purchased with their respective prices, the Tax Office may accept this as sufficient evidence. See examples below. Take photos of your receipts using your mobile.

The above does not apply for EFTPOS transactions because bank statements do not show cash withdrawals separately.

Practice Statement LA 2005/7

Example 2 - use of a bank or credit card statement combined with other evidence

22. Kylie, having just started her first full time job as a clerical worker, purchased a pen for use at work costing $50 from a jeweller's shop. She also bought a pair of earrings for $100 and paid for both items on her credit card. Having never completed a tax return before, she was not aware that the pen would be a deductible expense. She did not request or receive a receipt.

23. When it was time to prepare her return, Kylie realised that she could claim her pen as a work expense. She had also incurred union fees of $478, which were recorded on her payment summary.

24. Kylie checked her credit card statement and found that it showed an amount of $150 and the name of the jeweller's shop. Initially, she decided it would be safest not to claim for the pen because she had no specific receipt and she was not sure of the exact amount. However, she had kept the box the pen had been packaged in, and upon checking the box for further information noted the $50 price sticker on the outside. Before lodging her income tax return, Kylie made a note on the credit card statement detailing the two items and their respective prices and kept the pen packaging along with her bank statement.

25. By keeping the pen packaging and the credit card statement including her notation, Kylie has ensured she has sufficient information to substantiate her expense. The ATO will accept the combination of the pen packaging and the credit card statement as sufficient evidence to substantiate her claim.

26. Had Kylie not kept the box that her pen came in with the price sticker on it, but was able to obtain from the jewellery store a written breakdown of how much she spent on each of the items, she would also have been able to make a note on her credit card statement detailing the two items and their respective prices, and would have had sufficient evidence to substantiate her claim. The ATO would accept the combination of the credit card statement containing Kylie's notation and the written price breakdown from the jewellery store as sufficient substantiation.

DAY TIME TRUCK DRIVERS

REASONABLE OVERTIME MEAL ALLOWANCE - $29.40

e.g.
Some employees are paid $15 overtime meal allowance per meal. They may claim the difference between $28.80 (ATO rate) - $15.00 = $13.80 if they satisfy the above conditions and include the allowance as assessable income in the tax return.

You must be able to prove to the ATO a reasonable pattern of expenditure to show how you spent your meal allowance. Take photos of your receipts using your mobile.

TD 2017/19 "Example 1 Para 6. Because Samantha has spent less than the reasonable amount for overtime meal expense, she can claim a deduction for the $20 she spends and she is not required to substantiate the expenditure ( for  example, get and keep the receipt for the meal).

Para 7. If Samantha's tax return is checked by the ATO she may be asked to explain her claim for deduction. To do this, Samantha would show that she worked overtime, that she was paid an overtime meal allowance under an industrial instrument, that she correctly declared this allowance as income in her tax return, and  that she costed her meal at $20 based on the cost of the curry and drink she purchased from a nearby Thai restaurant."

MOTOR VEHICLE TAX DEDUCTIONS TO PICK UP A TRUCK

TO DO OVERNIGHT WORK

Travel to and from work is usually not a tax deduction.

Some exceptions are:


1. Carrying bulky equipment with no secure lockup at work.

 

Bulkiness of equipment is determined by size & weight.

 

Many overnight truck drivers carry a heavy tool box 35 kg plus spare oil & water and overnight equipment like a 15 kg refrigerator and stove with gas bottle.

 

Equipment is not bedding or clothes nor may be refrigerators & Stoves. Check with the ATO as I having been getting conflicting advice.

 

For tradesmen it could mean a minimum of a 40 kg tool box plus other items e.g. nail guns, drills, drop saws, materials, etc. Bulkiness is also determined by size e.g. Ladders, bench horses, large oil drums, spare tyres, etc.

 

Ask for a private ruling.


 

Motor Vehicle Tax Deductions

Uniforms and Protective Clothing

Mobiles & Office Equipment

Tools & Sun Protection

 

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