Industry's ATO change review call falls on stony ground

By: Rob McKay

ATO and FWC discount points made on driver travel claims

Industry's ATO change review call falls on stony ground
The ATO needs more convincing


Unless the trucking industry can come up with something irresistible, its united call for an Australian Taxation Office (ATO) rethink on its 43 per cent reduction in the amount a truck driver can claim in expenses without substantiation is likely to fail.

And claims of a lack of consultation with employers and the Transport Workers Union (TWU) and possible impact on enterprise bargaining agreements (EBAs) have been given short shrift by the ATO and the Fair Work Commission (FWC) respectively.

The ATO also revealed what led to the tightening of its claims limits.

"The outcomes of audits and a number of Administrative Appeals Tribunal decisions highlighted some employee truck drivers were not correctly making claims for food and drink expenses," a spokesperson says.

"For example, claims were being made for meals consumed on days not associated with overnight travel, 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.

"Accordingly, a single daily rate was provided to simplify the process required for a truck driver to make a claim using the reasonable expense amount."

Asked by ATN if the ATO liaises with the FWC about the changes it makes, such as with the contentious ATO determination TD 2017/19, an FWC spokesperson says: "There is no requirement for the ATO to consult with the Fair Work Commission regarding issues related to taxation law.

"The ATO determination does not have an impact on the entitlements negotiated under an enterprise agreement or made in a modern award, it is a decision that the ATO has made regarding what they believe to be a reasonable rate for allowances for the purpose of income tax deductions."

For its part, the ATO points out that its most recent consultation with industry was through a consultation paper titled ‘Substantiation exception for reasonable travel allowance expenses’ published on our website on September 30, last year.

"This paper provided an opportunity for all interested parties to respond to us with their feedback, opinions and suggestions," a spokesperson says. 

"As part of the consultation process, emails were sent directly to more than 60 industry groups requesting feedback on the consultation paper. 

"Almost half of these emails were sent to federal and state based organisations and associations within the transport industry. 

"This included the Australian Road Transport Industry [sic], Australian Trucking Association, Owner Drivers Australia, National Road Transport Association, Queensland Trucking Association, Road Freight NSW, South Australian Road Transport Association and the Tasmanian Transport Association."

On the travel claim itself, the ATO also fails to see an EBA link, saying the amount paid is a matter between employer and employee and that no equity issues can be involved in its decision in such cases..

It points to paragraph 33 of the Taxation Ruling TR 2004/6 that states: "In setting the reasonable amount for the purposes of this Ruling the Commissioner does notdetermine the amount of allowance an employeeshould receive or an employer should pay their employees.

"The amount of an allowance is a matter to be determined between the payer and the payee.

"The Commissioner determines the reasonable amount of travel and meal allowance expenses only for the purposes of the tax law, that is the amount that will be accepted for exception from the requirement to obtain and keep written evidence for substantiation purposes.

"It is not provided for the purpose of being used for employment or industrial relations purposes in setting the amount of allowances paid.

"The Commissioner is not entitled under the tax law to have any specific regard to the fairness or appropriateness of the allowance paid as part of any remuneration arrangement."

Yet there still might be hope for the industry campaign.

"We are happy to consider further information and feedback as to the impacts on employee truck drivers who incur food and drink costs on eligible travel, are paid a bona fide travel allowance at a rate higher than the reasonable rate for 2017/18 and there are circumstances indicating that the rate set may not be reasonable," an ATO spokesperson says.

"It is important to remind employee truck drivers that the Taxation Determination only provides relief from substantiation (keeping written evidence such as receipts for the food and drink purchased) where there is a travel allowance provided by the employer for overnight away from work travel, that the travel allowance is returned as income and that the amount claimed has been expended on food and drink.

"In previous years, the Taxation Determination provided a separate rate for breakfast, lunch and dinner for employee truck drivers; which combined added up to $97.40 for the 2016-17 year. 

"Truck drivers were required to determine the reasonable amount that applied to them for each trip, based on the period they were required to travel and which meals they consumed."

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