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Industry unites over handling of travel expenses change

ARTIO highlights to ATO conflicting obligations risk with enterprise bargaining agreement provisions


The Australian Taxation Office (ATO) has united the industry in its handling of work-related travel expenses changes.

The Victorian Transport Association (VTA) has added its voice to those of the Australian Road Transport Industrial Organisation (ARTIO), the Queensland Transport Association and the Transport Workers Union (TWU) in concern at how the change has been handled.

The VTA says it is in “lock step” with those organisations over the issue.

ATO Determination TD 2017/19, issued on July 3, reduces the “reasonable amount” that an employee driver, or an owner driver, may claim for travel expenses without substantiation by $42.10, which translates to a 43 per cent reduction.

In response, VTA CEO Peter Anderson, in his capacity as ARTIO secretary and treasurer, writes to the ATO to express concern about the lack of consultation with industry about the Determination, along with the impact such a significant reduction will have on individual drivers and their income.

“We are amazed the ATO has made such a far-reaching Determination that will leave drivers and their families so significantly out-of-pocket without bothering to inform the industry,” Anderson says.

“Equally concerning are flow-on effects the Determination will have on Enterprise Bargaining Agreements that had already factored in the previous rate.

“We have highlighted to the ATO that employers who have had EBAs specifying amounts payable in these circumstances approved by the Fair Work Commission could now be in breach of legal obligations because of the change.

“Regrettably, the impact of the ATO changing its view on what is a ‘reasonable amount’ for a driver to claim for a meal will be on their health and well-being because there is less money for them to spend on healthier foods, which usually cost more.”

The ARTIO has requested an urgent meeting with the ATO to discuss the Determination, which it feels requires immediate review and amendment.

The QTA has already criticised the ATO for lack of consultation.

“We are aware that it is common in the industry for some employers to make a component of wages ‘non-taxable’ to account for the tax determination,” it says.

“For example, some employers tend to deduct the amount from gross wages, tax the remainder, then add the $97.00/night back on.

“This gives the employee a higher net pay week to week as it was providing the drivers a non-taxable component to their wages.

“Employers who engage in this practice will need to amend the amount otherwise the employee will be left with a significant tax bill at the end of the year.”

Along with the ARTIO, the QTA notes that care should be takes to avoid confusing the nature of the change.

The advice is that the ATO determination “is a ‘Tax Law’ issue allowing a tax deduction from taxable income for work related expenses such as travel.

“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.

“Although it is common practice, it is not an employer obligation to make the ATO expense amount a non-taxable component to wages as per the example above.

“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.

“ARTIO/QTA believes that placing the onus on employees the claim the deduction provides significantly less complication and risk to employers for breaching possible PAYG tax obligations.” 

The TWU made its concerns public yesterday.

VTA members with concerns or questions about the determination are encouraged to contact its industrial relations advisor, Paul Ryan, on 03 9646 8590.

The ATO determination can be found here.

ATN has sought ATO and Fair Work Commissoin responses to the issues raised.

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