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Truckie travel expenses slashed by ATO

TRAVEL EXPENSE: The amount the determination considers reasonable has dropped from $97.00 to $55.30 from 1 July 2017.
TRAVEL EXPENSE: The amount the determination considers reasonable has dropped from $97.00 to $55.30 from 1 July 2017.

A DETERMINATION by the Australian Tax Office has slashed the amount a drivers can claim for reasonable travel expenses by 43%.   

Previously drivers could claim up to $97.40 without receipts for food and drink each overnight they were away.    The price has been reduced to $55.30 from July 1 2017.    

The reduction will no doubt have a serious impact on employers who make a component of wages 'non-taxable' to account for the tax determination.   

For example, some employers tend to deduct the amount from gross wages, tax the remainder, then add the $97.00.     The practice provides an employee with a higher net pay week to week,  as it was providing the drivers a non-taxable component to their wages.  

Because of the changes fleets will now need to amend the amount, otherwise it is expected the employee could be hit with a significant tax debt.   

Concerned, a number of industry bodies (WARTA & QTA) believe the decision was made without prior discussion or consultation and have submitted a letter of concern to the ATO Second Commissioner.    

WARTA and then the QTA alerted their members to the issue earlier in the week, committing to keep members updated on their progress. 

"This is a very separate issue from the requirement under industrial law for employers to pay under Awards travel allowances (e.g Long Distance Award travel allowance $38.43) an amount compensating employees for having to take major rest breaks within the vehicle," the QTA statement read.

Chief Executive Officer at NatRoad, Warren Clark said NatRoad is disappointed by the ATO's reduction in the daily limit on travel allowances.  

"At a time where the Federal Government and industry is working together to reduce the compliance burden, this change will negatively impact small businesses and their employees," he said.   

In response however the ATO claims they have consulted with on the reasonable expense amounts ,including for the transport industry.   

An ATO spokesperson said there were a number of practical issues highlighted by recent Administrative Appeals Tribunal decisions that lead to the change.   

"For example, claims were being made for days not associated with overnight travel, and also the total daily rate was being claimed including for meals that had not been consumed when travelling, for example, when the travel had concluded in the afternoon and dinner was consumed at home," the ATO spokesperson said.   

"While the reasonable amount for the 2017-18 year is lower than that for 2016/17,  it is higher than the rate of the allowance paid to truck drivers under the Road Transport (Long Distance Operations) Award 2010 and other travel allowance rates that have been noted as being paid in the trucking industry.   

It is important to note drivers can claim the amount directly in line with the determination when lodging a tax return at 'tax time' meaning they get a 'lump sum' refund from their tax return.   

More to come in Big Rigs Edition 15   

Topics:  ata meal natroad tax

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